How to regulate the crypto ecosystem?

How to regulate the crypto ecosystem?

This 2024 promise one of the most important events for the world of cryptocurrencies: he Bitcoin Halving. Halving in Spanish It means “halve”and in the Bitcoin ecosystem it means exactly the same thing: The amount of new Bitcoins that miners receive for mining new blocks is halved. This translated into the monetary world implies that Bitcoin “issuance” is halved. And of course, if the issuance (or supply of new Bitcoins) is reduced, and demand continues at its level, then the price must go up.

Although this event is calculated for the month of April, the market is already ahead. During the 2023 and the first 2 months of 2024, The price of this asset practically tripled, far surpassing any type of traditional financial asset. And this not only happened for Bitcoinbut it was transferred to the rest of the currencies. Ethereum (second in capitalization), for its part, reached a growth of almost 200% in the same period.

However, neither of the two currencies had reached their historical maximum at the end of February, which implies that prior to this great boost they had in 2023, had suffered a severe collapse. In short, we talk about extreme volatility assets. But the risk of this type of asset does not lie solely in its volatility.



Currently, if a user is interested in purchasing cryptocurrenciesyou can choose between different options. The simplestit’s a exchangethat is to say, a platform that allows you to buy, sell and exchange cryptocurrenciesbut the user does not have real control of the asset, but rather it is managed by the platform.

The purest formit is with a wallet with personal keys. In this case, the asset is associated with a personal wallet, and can only be exchanged with the keys of said wallet. Since the user is the one who has these keys, he is the true owner of the asset.

Another option somewhat more complexis buy an ETFthat is to say, an investment vehicle tied to the price of 1 or more cryptocurrencies. This requires invest in an international market (Commonly USA), so it is somewhat difficult for an investor with little experience.

Any of the 3 options requires get out of the traditional investment scheme that Argentines have when investing, whether they do so through a traditional Bank, or another institution that is currently regulated by the CNV. And that carries a riskbecause the lack of regulation means that all types of platforms can exist, some more secure, others less secure and some directly fraudulent (such as Generation Zoea company created by Cositorto and which ended up being a pyramid fraud).



Whether due to the volatility of the cryptocurrenciessuch as the risks related to the little regulation that the platforms dedicated to this ecosystem have, society faces a very risky asset, as well as with little and confusing information about the environment. And this without a doubt It is an alarm for the State, which must decide what role to take.

Some specialists suggest that the best solution is total ban. In fact, in 2022 there was a attempt of two banks (Galicia and Brubank) to offer their clients the possibility of access the purchase of cryptocurrencies through homebanking. However, a few days after this announcement, the Central Bank of the Argentine Republic (BCRA) came out to clarify that The activity was already prohibited for the banks, and the entities reversed the measure. The problem is that banning this type of asset may not be very useful, especially in times of euphoria and price growth like these. Society leans towards this type of assetsand it does so in a state of very low supervision.

Another option is the regulation. That is, allow the cryptocurrency tradingbut use the formal institutions that the state has to regulate the activity, such as the CNV or even allow traditional banks to offer this type of investments, always under the supervision of the BCRA. In the last days, It was leaked that the National Government is thinking about regulating the sector, allowing some exchanges to enter the orbit of the CNV. However, this regulation would not contemplate the entry of other important actors such as banks and other financial entities.

Move forward in that direction, and with a commitment of formal institutions not only would increase user securityif not would combat incorrect uses of this technology how are the illegal money transfershe money laundering and the tax evasion.

Source: Ambito

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