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Since its inception in 2008, the cryptocurrency market has expanded and become an integral part of the global financial system. It has altered economic structures as they penetrate the capital market and day-to-day financial transactions.
However, they have also raised concerns about potential risks to investors, businesses, consumers, and the environment. As such, policymakers and government leaders worldwide have become keen on writing, creating, and amending cryptocurrency regulations.
Data from the Atlantic Council’s Cryptocurrency Regulation Tracker shows nearly two-thirds of the countries reviewed are exploring changes to their crypto regulatory framework. The research focused on 60 countries, particularly the G20 and those with the highest crypto adoption rates.
India, for instance, has made crypto regulation a primary goal of its G20 presidency. Meanwhile, the US has become stricter after the collapse of FTX, the former third-largest crypto exchange by volume.
Policymakers highlighted the need to improve crypto-asset regulations at the Spring Meetings of the World Bank (WB) and the IMF. Central bank governors in many countries and G20 finance ministers also discussed the future of cryptocurrencies.
The sessions made two things clear. First, there is a visible need for robust and globally coordinated cryptocurrency regulations. Second, policymakers are facing several obstructions from their goals.
Given all these, many opportunities are present to enhance and expand the capabilities of cryptocurrencies to boost investments, remittances, and government spending.
Yet, we must address primary challenges to revise crypto regulatory frameworks. This article will discuss the state of crypto regulation globally. We will also delve into the opportunities and challenges ahead of the changes.
How Crypto Regulatory Framework Varies Around the World
Countries around the world have differing views on regulating and legalizing cryptocurrency activities. Cryptocurrencies are widely accepted as volatile investments, although they strongly correlate with inflation, particularly Bitcoin (BTC) and Ethereum (ETH). The data below shows how the price of a single BTC and ETH varied with inflation in the past year.
In 2022, the US inflation accelerated,…
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