Another record high for Bitcoin calls for new demands for regulation
With Bitcoin hitting yet another record high over the weekend, as we predicted, financial watchdogs must prioritise crypto regulation.
Bitcoin, the largest cryptocurrency by market cap, reached an all-time high, exceeding $61,000 on the deVere Crypto exchange on Sunday for the first time.
As it stands, whether the crypto sceptics like it or not, we cannot get away from the fact that Bitcoin is becoming an ever more important part of the global financial system.
The number of Bitcoins in circulation are now worth $1 trillion, with prices having improved 890% over the past year. Indeed, the majority of financial institutions, including investment giants and payment firms, are now getting behind the world’s largest digital currency.
Interest from retail investors is also skyrocketing.
Over the coming years, the move towards cryptocurrencies will increase at an accelerated pace. As such, financial regulators must make regulations a key priority for the cryptocurrency sector.
As it grows in dominance, Bitcoin and other digital currencies need to be held to the same standards as the rest of the financial system with a strong, workable, global framework.
This will help to lessen any possible disruption to global financial stability, safeguard investors and provide an economic boost to countries that adopt and stick to it.
I’ve said this many times, but one of the best ways to address the regulatory issues is via the exchanges.
The majority of foreign exchange transactions go through banks or currency houses, which is what we need to see happening with cryptocurrencies.
Of course, when flows move through regulated exchanges, it will be far easier to deal with any potential wrongdoing, such as money laundering, and ensure tax is paid.
Therefore, in order for this to happen, banks will need to open accounts for exchanges, which is why they need to be regulated.
This is such an important time for Bitcoin, which is now worth more than the GDP of many countries.
For this reason, financial watchdogs must introduce regulations for cryptocurrencies sooner rather than later through the exchanges.