Cryptocurrency regulations are an important factor in the operation of the market in a nation. Some countries have strict rules for the Crypto industry in comparison to others. Europe as well will put the US behind in this case. So, lawmakers and authorities need to make some clear regulations on the market. Moreover, if you are looking for a regulated trading platform to avoid any problems in the future, then you may choose to trade with bitql.
At present, the EU is figuring out the regulations on the Cryptocurrency market. The authorities are preparing a text that will bring a unified licensing system for Crypto exchanges. These rules will apply to the exchanges present around the EU region. These fall under MiCA regulations. The US does not have any regulatory clarity on the market yet!
Situation Of The Crypto Space In The US
The US is the leading name in any legal framework in the field of technological innovations. It is the first one to form legal regulations on any innovative space. But, in the case of Cryptocurrency, they are not providing any regulations yet.
Crypto exchanges in the nation undergo regulations at the state level. It is done with the help of a mix of money-conduction regulations. In this, they underestimate their customers and they experience less protection as well. Digital currencies are digital commodities of their sort. But still, there are no such unified federal regulations for Cryptocurrency exchanges.
To make such clarity, Congress needs to pass one such legislation that identifies Crypto as a digital commodity. Also, it needs to have a separate jurisdiction for CFTC to watch the crypto exchanges. Also, the fresh bipartisan bills indicate that this may happen quite soon.
Overburdening The States
Each state is regulating the exchanges, which should have been done by the federal government. The states are now the prime regulators of these exchanges. Along with these, they also watch the providers of online payment under the money transmitter chains.
All these rules make sure of the customer’s security. And, it also makes sure that these transmitters do not make any other use of the customer’s money. Now, as the exchanges have customers in different states, they are bound to follow the rules of all these states.
To follow the laws, the exchanges need to first understand and then obey the similar. The entire process becomes lengthy and inefficient. With this inefficiency comes the cost of customer security. Also, another important point is that the laws do not tend to safeguard their consumers during spot trading from market manipulation. In this aspect, the authority states that the digital securities in the exchanges are similar to the national security exchange. With this, they will enter the investor protection system.
But what about the coins that are present on all domestic exchanges is a matter of curiosity among all. In this aspect, Coinbase states that these are not securities and it ends all the debate on the topic. These tokens which are not securities will be termed commodities and are under CFTC’s jurisdiction. But, the jurisdiction of the CFTC is not broad and does not cover many aspects.
Congress can work on this matter and develop a broad definition for digital commodities. With this, the CFTC will have the power to watch and address other issues in the market. These issues can be fraud, market manipulation, transparent market, and others.
A Unified Fed Regulation
It is high time that Congress should work on this unified regime for Cryptocurrency. With this, three prime goals will be fulfilled. In the first goal, there should be a clear distinction between digital commodities and securities. This is very important for maintaining a healthy Blockchain ecosystem in the nation.
In the second goal, customer protection should be meaningful under the regime of CFTC. And for the final one, this new system should not unnecessarily burden the leaders of this industry. It should protect the constitutional rights of these industry actors.
Conclusion
To protect the consumers from the inefficiency of the market a unified regime needs to be present. Also, the exchanges are regulated by the states which result in inefficiency. To reduce all these, a unified system is a must and the states should be liberated from overburdening.
