Why Should Cryptocurrencies Be Regulated?

Why Should Cryptocurrencies Be Regulated?

Even though cryptocurrencies became an incredible medium of making money as the last on the actions, they are not safe. Every government of the world is very much concerned about the evolution of cryptocurrencies and their spread in different corners. You need to understand that it is undoubtedly the right time to decide if you want to go for cryptocurrency or not go for it. However, before you decide, it is crucial to understand the facts. Recently, there has been news from different corners of the world to regulate cryptocurrency. Every crypto coin that is not under the government will be banned, and the nations will launch their cryptocurrency. It can be a positive thing for the whole cryptocurrency space or a negative point.

No matter what is going to be the impact of launching central bank digital currency, every investor needs to have a look at why they should be regulated. For many people, the fluctuating prices of cryptocurrencies become dreadful because they consider it a store of value. When you store your valuables with something, you want it to remain stable or go higher. But, the situation with cryptocurrencies is not the same. Sometimes, the value of different crypto coins goes lower, while sometimes, they go higher. It is not a situation that is good for cryptocurrency investors all the time. They may lose their money, but still, they keep on investing. Therefore, crypto may need rules and regulations. Let’s have a look at them.

[1] Classification of Cryptos. Today, cryptocurrencies are not at all classified. For most people, digital tokens, NFT and crypto coins are seen. They do not know any difference between these things, and it is undoubtedly creating a vast amount of confusion among the investors. When people are not even aware of cryptocurrencies, they will not make the most out of them. The government does not want this to happen. The government wants everyone to be very aware of their tools for making money. Therefore, it is required for cryptocurrencies to be regulated anytime sooner.

[2] Protection of Investors. Protecting cryptocurrency investors from the high risk of market fluctuations is also essential for regulating crypto coins. Today, market fluctuations can occur anytime and therefore; the investors are at risk all the time. It is not a good thing for anyone who has an investment in the cryptocurrency space. To get the most of the cryptocurrencies, they need to be a little bit stable and need to face an upward trend. It can only happen when the prices are in control.

[3] Technological Risk. The risk of ever-increasing modern Eire is also an important reason because of which cryptocurrencies need to be regulated. The technological risk is one of the most important reasons because of which the governments of different nations are looking forward to having control over the crypto coins. Blockchain technology can become obsolete in future if anyone uses it for the wrong purposes. Therefore, keeping a look at the technology used in cryptocurrencies is very important. That is only possible if the government intervenes in the whole process at portals like digital asset.

[4] Cybersecurity Risk. Cyber security has also become an essential concern for the government when cryptocurrencies emerge. Everyone in different corners of the world wants to make money. It makes them restless, and therefore, they want to do something in this department. While doing this, many people ignore the cyber security risks, and the government has to take a step towards it. Therefore, regulation is perhaps an important step that the government need to take.

[5] Money Laundering Concerns. Money laundering is nowadays spreading to everyone and the world and needs to be controlled. With the help of money laundering, many terrorist activities are taking place in every country, which can cause a risk to the lives of people. Therefore, cryptocurrencies need to be controlled and regulated to lower the risk of money laundering. If the government wants to decrease the money laundering activities through the crypto coins, they have to hold the prices and their holdings.