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Recent events in the crypto space have the odour of triumph, but they are just minor battles in a larger conflict. Changes that are “dramatic” are on the way.
Many in charge of conventional finance would not let Bitcoin (BTC) disappear into thin air without a contest.
That’s the sentiment expressed by the World Economic Forum’s head of blockchain and digital assets, Sheila Warren, who said a “dramatic” round of regulation was about to befall Bitcoin and the wider cryptocurrency space. Warren told Bloomberg on Thursday:
“We’re going to see another round of pretty dramatic attempts at regulating this space. As there’s more and more activity in these spaces there’s more and more demand signal for regulators to get engaged and involved.”
Warren’s remarks came only hours after Coinbase became the first cryptocurrency exchange to list its stock on the Nasdaq. When combined with Bitcoin’s meteoric rise over the last year to new highs above $65,000, industry analysts hoped the connection would add some renewed credibility to the cryptocurrency sector and perhaps lead regulators to loosen their trigger fingers.
The probability could also become a reality, particularly if Securities and Exchange Commission Hester Peirce’s proposed regulatory approach is taken into account. Peirce recently proposed that crypto ventures be given a three-year grace period before having to register the resulting token as a security, provided certain requirements are fulfilled.
To escape more SEC inspection, a blockchain network will have to demonstrate, among other factors, that it is adequately decentralised by the end of the three-year span.
However, Warren believes that the attention is inevitable and that it would just intensify when Bitcoin’s price increases higher. Warren stated that the whirlwind of action triggered by the crypto boom and the Coinbase listing was just the beginning of the operation, not the end.
“Some see this as the peak; I think that is completely incorrect,” Warren said.
The rhetoric emanating from government officials on the subject of cryptocurrency policy continues to focus on customer security — a very real risk in a market still vulnerable to malicious hacks, shady schemes, and expensive unintentional glitches.
Calls for legislation, on the other hand, are driven by policymakers’ innate ability to regulate the issuing and movement of money within their territories. The decentralised, free-wheeling existence of cryptocurrencies presents a major challenge to the dominance of fiat systems. Most global economies are either in the phase of absorbing the effects of cryptocurrency by taxation and legislation, or they are developing central bank digital currencies to cope with, and ultimately substitute, it.