Regulators must rush to avoid ‘peanut buttering’ the crypto boom. The regulatory landscape is complex, but the same old menu may not be sufficient for cryptocurrencies.
Yahoo Finance and Decrypt teamed together on Tuesday in an effort to draw attention. To all of the ways in which bitcoin is now becoming mainstream. And there is no shortage of headlines extolling.The virtues of digital currency and how they are attracting the public’s attention.
Bitcoin (BTC-USD) is currently trading at more than $68,000. Memecoins have evolved from being a lighthearted joke. To becoming a legitimate investment. Vacancies in the industry are being created at a breakneck speed.
Exchange-traded funds (ETFs) that are based on spot and futures prices. Are poised to become the next big thing. And the rise of decentralized finance (DeFi) and digital wallets has attracted. A large number of small investors, which has attracted the attention of authorities. Such as the Securities and Exchange Commission (SEC).
Even the real estate industry is getting in on the act.
So, as new products such as exchange-traded funds (ETFs) emerge and the blockchain. It creates new digital coins (Morgan Stanley recently estimated the crypto universe at around 10,000). Which regulatory agency is best positioned to serve as the sheriff of what SEC Chair Gary Gensler refers to. As the “Wild West” of financial markets? The Securities and Exchange Commission (SEC). Should regulators impose decades-old securities laws on a new. Technologically advanced sector that is being heralded as nothing short of a financial revolution. Or should they refrain from doing so?
As the regulatory discussion takes shape, one position has considerable merit
As the regulatory discussion begins to take shape, an argument made by Ripple executive. Asheesh Birla to Yahoo Finance’s Jennifer Schonberger on Tuesday appears to have some merit. The clearer regulations, Birla asserted, will help the business thrive. But he cautioned that the haphazard enforcement of outdated laws could hamper innovation.
In his words, “I’m not supporting taking old legislation and putting it on top of Bitcoin like peanut butter.” “We are arguing for clear regulations that modernized to reflect the capabilities of blockchain. And cryptocurrencies, and thus far, this has not been the case.”
That theme is particularly relevant at this time. Given that Congress is currently considering a slew of blockchain-related proposals. Including oversight of cryptocurrency miners who may act as brokers, stablecoin issuance. And decentralized financial institutions (DeFis) that lend in the same way that traditional banks do.
“Does regulation serve as a benefit or a hindrance?” In a recent research study, Morgan Stanley analysts asked this question.
For institutional investors, “it is dependent on the shape of regulation. Assuming that it takes the form of what now being debated in developed nations. Defined regulation may boost the appeal of adding cryptocurrency exposure. To portfolios regulators must,” according to the bank.
As more ETFs hit the market, expect the regulatory discussion to heat up
As more exchange-traded funds (ETFs) enter the market. The argument over their regulation is likely to become increasingly prominent. “It’s become a bit of a political problem,” Grayscale CEO Michael Sonnenshein. It is aid in an interview with Yahoo Finance’s Brian Cheung on Tuesday. “Products that are also based on derivatives or real-time prices,” Sonnenshein said.
His conclusion: “In the last week, we’ve seen bipartisan support for a bitcoin spot ETF… Fighting for this and ensuring that there’s a level playing field amongst numerous applications. Out there, regulators must and investors also truly do have the option.”
The more complex the market becomes, the more vocal detractors. It will become in their call for more stringent investor protection. In turn, this means that even more issues will raised about whether. The present securities architecture is also appropriate for this imposing new digital structure known as bitcoin.