The volatility of cryptocurrencies is doing two interesting things – making people with large and flexible portfolios very rich, and unnerving the traditional financial world. Regulation is coming.
With the massive expansion in brand names, and so many more companies in the pipeline, steps were made with regulations for cryptocurrency exchanges. This regulation will takr effect in the US starting with the state of Washington. With the passing of Senate Bill 5031, money transfer laws now require that all cryptocurrency companies obtain a license. They will also need a third-party audit. Lawmakers finalized this striking move on July 23 which took seven months to complete. So what will this mean for investors?
Starting up a cryptocurrency has been easier than it should be. Any company with sizable funds, and IT department, and a few blockchain programmer consultants can create a new currency. We’ve already seen companies with international retail and franchises starting their own branded currency. Imagine going on holiday, seeing the latest iPhone at a discounted price, and buying it using iCoin. That reality is closer than you think.
Should buyer be worried?
The regulation is limited to the US at the moment, but Europe is already developing a concept for limiting access to cryptocurrency exchanges. Experts stand by cryptocurrencies, but there are others who chose not to invest. Many are fearing the entire cryptomarket is nothing more than an elaborate pyramid scheme. A clever con designed to filter money from those who can’t afford it up to a very select few.
Don’t expect changes of any significance in the next 18 months, from your point of view. The only people that will feel the pinch from the regulations are the cryptocurrency creators themselves. For now, cryptocurrencies are still a relatively safe and massive moneymaker for those able to forecast the highs and lows that are synonymous with this new and explosive asset.