Those who control the traditional financial sector will not let bitcoin (BTC) go down without a fight.
That’s the thinking of Sheila Warren, head of blockchain and digital assets at the World Economic Forum, who said a dramatic round of regulation is about to replace bitcoin and the broader cryptocurrency space. Warren told Bloomberg on Thursday:
We will see another round of rather dramatic attempts to regulate this area. As there is more and more activity in these areas, there are also more and more signals that require regulatory intervention.
Warren’s comments came hours after Coinbase became the first cryptocurrency exchange to list on the Nasdaq. Combine that with bitcoin’s meteoric rise to nearly $65,000 last year, and industry experts hoped the relationship between these two factors would give the cryptocurrency space a new legitimacy and perhaps prompt regulators to lower their guard.
This possibility could yet become a reality, especially given the approach to regulation recommended by Securities and Exchange Commissioner Hester Pierce. Pierce recently proposed that cryptocurrencies be given a three-year grace period to effect transactions before the resulting tokens are registered as collateral – provided certain conditions are met.
Among other things, the blockchain network must demonstrate that it is sufficiently decentralized at the end of the three-year period to avoid further investigation by the SEC.
But Warren believes such scrutiny is inevitable and suggests it will only increase as bitcoin prices continue to rise. Warren said the surge in crypto boom activity and Coinbase’s listing was just the beginning of the process, not the culmination.
Some people see it as a highlight, I think that’s completely wrong, Warren said.
Government rhetoric on cryptocurrency regulation tends to focus on consumer protection, a very real issue in an industry that remains vulnerable to malicious hacks, shady scams, and costly accidental mistakes.
However, the call for regulation also stems from the natural desire of governments to control the issuance and circulation of money within their borders. The autonomous nature of cryptocurrencies poses a serious threat to the dominance of fiat systems. Most major economies are already cushioning the impact of cryptocurrencies through taxation and regulation, or creating central bank digital currencies to compete with them and eventually replace them.
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