Regulations that need to be passed before retail start accepting crypto
This article is written by the QuickX team. Opinions of the writer do not represent the publication’s.
Cryptocurrencies and regulations have a love-hate relationship. If there is anything that’s keeping cryptocurrencies from becoming a legit, widespread form of payments around the world, it is the lack of regulations. The enthusiasts are most often not able to comprehend the need of regulations in a concept of decentralization which is making the crypto market more volatile than ever.
Though a significant population in the world is adopting cryptocurrency in their day-to-day life, because of the multiple lawsuits and warrants against some companies is raising speculations regarding cryptocurrency. Over the last decade, we have been presented with reports of considerable fraud, price manipulation, and theft in the crypto market. That is to say, cryptocurrency is not exactly the investment utopia it was predicted to be. At least, not yet.
The roller coaster rides that the crypto prices seem to take every day happen with governmental currencies as well but in a significantly lesser degree because the governmental currencies are subject to certain governmental regulations and oversights.
This appears to be the biggest paradox. Cryptocurrencies—for their steady growth and challenges against price manipulation—need to be subjected to a certain regulations but the lack of regulations is, in the first place, the prime reason why it is a preferred investment option. Crypto investors desire the stability that certain regulations will bring but at the same time, they do not want the cryptocurrencies to be regulated by a central authority.
Effect on Crypto Payments
The ever-changing and volatile crypto prices obviously affect the usage of cryptocurrency as a legit payment method which in turn is going to affect its mass acceptance. Advancements have come a long way with numerous countries accepting cryptocurrencies as legitimate payments for some sectors and services and crypto-projects enhancing the use and access of cryptocurrency but there is a still a long way to go.
The year 2017 and most of what has passed of 2018 has seen a major battle between regulations and crypto market with multiple countries debating whether or not to legalize the trade, use, and possession of virtual currencies as an official part of the financial system.
The major countries such as Japan and the United States have passed certain regulations concerning the use of digital currencies for commerce but are they really working? At the same time, there are countries like China who have strictly banned cryptocurrencies and India who are debating how to manage this ever-rising market.
Why aren’t merchants accepting crypto payments?
Apart from the volatility of the market, there are two other variables that are forcing merchants to not accept payments in cryptocurrencies:
- Cryptocurrencies may be deemed assets
We have countries that have rendered all cryptocurrencies as illegal or not-legal tender. The list has China, South Korea, Singapore, and the United Kingdom to name a few. The unclear status of cryptocurrencies varying according to the geographical barriers increases the possible risks for merchants which is why they are reluctant to accept crypto payments.
- Tax Implications vary by country
Because each country has a different status of cryptocurrency, the taxation laws vary accordingly. Reporting cryptocurrencies earning for the purposes of taxation can be both a straightforward and an overwhelming process.
What can the governments do?
The curiosity and demand of the everyday users of cryptocurrency is a major contributing factor in the debate of its regulation. The entire concept is decentralized so the government cannot put into place a centralized authority to oversee the entire market. But what the government can do is:
Allow Merchants to accept crypto
Beginning with defining what it means for a cryptocurrency to be banned or illegal in a country, the government can move forward towards allowing merchants all over their state to accept cryptocurrencies as a legitimate form of payment. A regulation can be passed with regards to license issuing which each merchant would be required to have in order to facilitate cryptocurrency payments.
This is the scenario in most of Europe and United States where The ĞŐŤ payment gateway is being employed to allow merchants to accept payments made in cryptocurrencies.
Engage Crypto Payment Services
To reduce the chaos, and to educate people with the technology behind blockchain and cryptocurrency, the government can engage the leading crypto payment services to provide solutions to merchants in order to enable them to trade in cryptocurrencies. An example of such a platform is BitPay which is a bitcoin payment service.
Issue their own cryptocurrency
Many countries have already done this and many are on the way of doing this. To cryptocurrencies from being exceptionally volatile all the time, the governments can issue their own cryptocurrencies regulated through established exchange rates and other similar regulations.
The challenges for regulating cryptocurrency are deep but with the prominence and usage it gaining, finding ways to overcome those challenges gets easier. What is required is the acceptance by the government first followed by a transparent allowance for average users.
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