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Cryptocurrency Regulation By Nation 

Gold coin bitcoin lying next to judge hammer closeup. Illegal e-business concept

Cryptocurrency was originally made without regulation in mind. As an alternate and less restricted form of currency, making transactions via the blockchain easier and more accessible to anyone. However, it also turned the crypto sphere into a Wild West – a field of lawlessness, risk, and rug pulls. 

To address the ever-evolving crypto market, and backed by several recent big-time incidents, various countries are slowly adopting regulations. Here’s what it looks like as of mid-2024, along with the regions that are implementing these rules. 

Registration 

In the early days of crypto, anyone can launch a crypto token and sell them to the masses. And while this looks like potential profit for investors, many projects end in developers pulling out of the market. What’s worse, these developers cannot be tracked, leaving investors out in the dust. 

Aiming to prevent these from happening and promote trust among crypto businesses, regions like the EU and UAE are pushing for licensing and registration. With this initiative, crypto firms must secure a license for the country’s regulatory body to do business.  

Fiat-Based Stablecoins 

There are two main forms of cryptocurrency: volatile coins and stablecoins.  

Volatile coins are more popular in the market because they tend to generate more value in a short time. However, as how fast it can rise in value, prices for volatile coins can also easily drop in an instant.  

Stablecoins like the Ethical Token, on the other hand, tend to grow at a slower pace. However, they provide more security to investors as they’re tethered to real assets.  

Seeing the potential of stablecoins, many nations are leaning toward releasing stablecoins based on their local currency. One of the more popular fiat-based stablecoins is the USDC, which is rooted in the US Dollar. They’re also working on clearly defining reserve requirements and clearer redemption rights, leading to better transparency and building trust among investors.  

Consumer and Investor Protection 

One harsh truth of the crypto market is its lack of consumer protection. With its laissez-faire approach, crypto firms were previously not required to provide disclosures or security to investors when offering their tokens.  

To prevent this oversight, countries like Hong Kong and regions like the EU and UAE are recommending better protocols for tighter consumer protection. This includes requiring crypto firms to implement “positive friction” and provide proper disclosures regarding the source of assets to consumers.  

Know Your Customer (KYC) Protocols 

Anonymity was a big deal in the early days of crypto trading – anyone could transact without declaring proper identification. And while this was cool, it led to numerous illegal activities like money laundering.  

In coordination with the Financial Action Task Force’s Travel Rule, crypto firms are mandated or in the process of mandating to conduct proper KYC. India, Hong Kong, and Switzerland are some countries that require KYC for opening crypto accounts. This helps authorities track transactions and monitor for any undesirable actions from criminal organizations.  

The world of cryptocurrency is constantly changing, and countries are slowly transitioning into full crypto adoption. These are some of the major regulations seen in multiple countries, with more changes to follow shortly.  

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