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What kind of regulation should Bitcoiners expect?

Photo of: Nathan VDH
by Nathan VDH

With the democratization of cryptocurrencies comes a nagging threat of regulation. For the former SEC boss, this scenario is increasingly likely. A ban on Bitcoin, on the other hand, is ruled out.

The democratization of cryptocurrencies has probably never looked as good as it will in 2021. Visa is currently conducting experiments to directly accept crypto payments on its network.

Financial giants are introducing Bitcoin products to the market. As for PayPal, it now offers to pay for purchases in cryptocurrencies in the United States. And the firm is preparing to expand this service internationally.

But this democratization is accompanied by increasing attention from regulators. Will they finally step in and implement new rules that could affect the prices of digital assets?

In this area, nothing is set in stone, including Bitcoin. That’s what former SEC director Jay Clayton reminded CNBC on March 31. BTC is certainly not a security, but this status does not make it immune to new regulations.

And those regulations could come into effect soon. “The fate of digital assets will depend in part on national and international regulation, and I expect regulation to come into play in this area, both directly and indirectly,” he says.

Does he have any information that would support such an assumption? He denies knowledge of any upcoming legislation, especially while he was still recently head of the SEC. But Clayton believes that regulatory change is credible.

“I expect, and I’m speaking now as a citizen, that regulation will apply in this area, both directly and indirectly, whether it’s through the way digital assets are held in banks, security accounts, taxation, etc. We will see that regulatory environment evolve. “

In an interview with Yahoo Finance, the founder of the $150 billion hedge fund Bridgewater Associates, said he was likely to see a ban on Bitcoin in the US. This policy would replicate the one applied to gold in the 1930s.

But for the CEO of Gemini, Bitcoin is probably safe today from such a ban. Tyler Winklevoss cites previous court decisions to back him up.

“There are too many precedents that have been set by the courts. The Coinflip order, which was an enforcement action by the CFTC, and which was upheld by the courts, considered Bicoin a commodity on par with gold. “