Cryptocurrency regulations should follow a ‘do not harm’ approach
At a time when regulations are strangling the cryptocurrency industry, U.S. Commodity Futures Trading Commission [CFTC] Chairman J. Christopher Giancarlo said to take a leaf out of the internet chapter when it comes to regulation of cryptocurrencies. He explained that the government used a ‘do not harm approach’ on the internet which prospered the cyberspace. He advised the same approach be used on cryptocurrency regulations as well.
"And I'm advocating the same approach to cryptocurrencies and all things having to do with this new digital revolution of markets, and of currencies, and of asset classes," Giancarlo said during an interview with CNBC. However, he also warned the people about cryptocurrency fraud and manipulation. "When it comes to fraud and manipulation, we need to be strong. When it comes to policy making, I think we need to be slow and deliberate and well informed," he said.
On being queried about the CFTC regulations on the cryptocurrency industry Giancarlo said, “Some would say we're too slow, others have said we've been too fast. So, we at the CFTC saw the very first regulated offerings of bitcoins futures. No other regime in the world has allowed this to go forward." CFTC which overlooks derivatives, futures and commodities recognized cryptocurrency as a commodity in 2015. Both CFTC and SEC are together looking at combating fraud and manipulation in the cryptocurrency industry.
Crypto regulations have a major impact on the cryptocurrency prices. History proves that new regulations implemented by countries have always affected native currencies. The prices tend to experience a sharp dip as wary investors pull back from the market by selling off all their assets to invest again until the market resumes a stable trend. Some among the regulatory authorities have taken a positive stance on cryptocurrencies along with crypto experts suggesting that smart regulations are the need of the hour.
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