Winklevoss Twins: Regulation Needed to Address Crypto ‘Trust Problem’
https://dcebrief.com/winklevoss-twins-regulation-needed-to-address-crypto-trust-problem/
https://dcebrief.com/winklevoss-twins-regulation-needed-to-address-crypto-trust-problem/
Trust is invaluable in financial services. DNotes is always committed to be the inclusive and trusted digital currency since the day of launch five years ago.
I agreed that for digital currencies to furnish and resume its rapid growth path there must be some rules and regulations to facilitate consumer protection, efficiency, orderly conduct, and secured storage of assets.
I think the twins make a fair point, that we need to fix the trust issue within the industry -- and I think a lot of that regulation is the government opening up the existing system to cryptocurrency so that professionals can come in and work towards that improved reputation. Though the fact cannot be discounted that they are pushing for regulations that would add costs and stifle competition for Gemini, and thus, industry innovation would be limited to existing club.
Agreed. That's always been the main danger of anything more expansive than light-touch government regulation. Where government extensively regulates, you have large industry players lobbying to shape rules that tend to block smaller startups from entering the market. That's why a light-touch approach is the only way to remain innovative and competitive. Good observation, T.
There are multiple beneficial scenarios that I can see going forward:
One is that some of the regulatory agencies make decisions that would see the financial system opened up to cryptocurrencies. This would allow them to be networked properly with the traditional financial system. Regulatory oversight of many players could be beneficial, but I believe this would best be within the capacity of forced transparency and adherence to best practices -- as opposed to expensive licencing and costly regulatory requirements that can cost hundreds of thousands, perhaps even millions to comply with.
The other would be what some agents in the space are doing, whereby they actively publish daily data, proof of funds, solvency and other materials that prove the health of the project or business. There is also the possibility that independent agencies can give 'approval stamps' or other such things in a much more cost-efficient manner than otherwise. However, there would need to be checks to ensure that these independent agencies are not as prone to corruption -- for example two audits could be conducted by two separate appraisers that do not know one another and do not work in the same division (one is out of city). Each company would be appraised twice per year (once by each appraiser). I'm sure they could think of some fancy way to use blockchain to mitigate potential corruption -- though I think there will be better strategies than the above going forward that can promote transparency in the medium term.
Either way, it's good to see people moving along in the space -- though most of that effort has been to turn cryptocurrency into a wing of traditional finance. The Winkelevoss twins want to be an additional intermediary to take a clip off the ticket when you make payments. The opportunities and cost reductions that cryptocurrencies offer make them comparably more profitable than existing systems, and could make it much easier to bank those in developing nations.
Touched on a few great points here. It is a sensitive balance and I agree good light touch regulation would start with transparency. Basic consumer investor protection could include a registration process for those seeking investment, verification of the people involved, and as you said a public means for investors to verify. You would know for sure they are who they say they are where to find them when and if they don't do as they say they are going to. Then reporting requirements that would allow the investor to know what is going on with their investment. This would make it much easier to hunt down bad actors and hold them accountable, preventing a good portion from entering the market in the first place.
I am positive the industry will pick back up and head in the right direction, this is still just the beginning and DNotes is on the right path to bring the world changing potential of digital currency to the masses.
