Topic: Is regulation of cryptocurrency exchanges essential for mass adoption? - page 4. (Read 543 times)

It was not necessary for now but if we are talking and aiming for mass adoption, that is somewhat important and a must, as I believe.
We can consider that "crypto regulation" is a contributing factor that would affect the mindset of the people and gain trust. With this regulation, people have the confidence that the government is supporting this and whatever it happens, the authorities will help us.

Yes, many individuals are still doubtful about the capability of Bitcoin and one reason is a blatant scams happen to many exchanges I think, regulations will help to protect us and these scammers will stop.

Let's all it what it is, we live in a world where most services are kind of regulated to provide security...perfect example is PayPal, eBay, backmarket etc , these companies guarantee protection to its users in case of a hack, or bad business transaction which has helped in growing it's userbase.
If same concept is applied to crypto I think it will bring in more users knowing very well that their assets are protected, less scams in the industry as KYC is used,a and  most importantly will  bring about investor confidencea and spill over to demand. So for the markets to see exponential growth regulation is the missing piece of the puzzle.

Which is the downside of being unregulated, anything bad that comes with the industry is pinned on you.

I believe that regulations would increase the trust of investors to some extent.  And true to what you say, exchanges that wants to keep operating in some regulated regions needs to comply before they can get their license and if not, they  won't be allowed to operate.

But it looks like some exchanges are finding it difficult to comply with regulations. You must've heard about Bybit's suspension of their operations in the UK due to regulatory issues. Meanwhile Bitget is in compliance and are still operating in that region. Binance also exited the US markets owing to regulatory issues. I'm genuinely interested in knowing why some exchanges are complying and others aren't.

It is like a dilemma and obviously every cryptocurrency enthusiast or a bitcoin will surely choose adoption over outright ban. Obviously there are some advantages of regulation but the disadvantages out weighs the advantages. If there is regulation, there rate of adoption will increase for institutions and companies but then decentralisation will be highly affected.
In the other hand, government purpose of adoption is not for the wellbeing of the citizens as they claim. They just want to control and sensor all factors and be able to tax everyone effectively in the cryptocurrency industry. We cannot reject regulation because if it doesn't happen today, it will happen to tomorrow and it must happen as long as grow of the cryptocurrency technology is experienced.

Regulation of crypto may or may not  assist in mass adoption. It depends on where and if properly done. For me what matters is the interest that the common people have on it. They can go on and engage in it all by themselves with well known and trusted exchange as before, in addition to continuous creation of awareness about its usefulness.

Now this reminds me of one question by an attendee of our community meetup that I’ve co-organized a month ago.

Although I am not really in favor of regulation, but I am open to it. Regulation would singlehandedly destroying the purpose of decentralization. This is what Bitcoin and cryptocurrencies should be (including Web3), it’s just that the government are just sticking their nose into our world and wanted to slowly control this space and our freedom.

But if we were to choose between regulation and outright ban, I would choose for regulation at least even if I don’t like it. I believe that centralized exchanges (CEXs) can co-exist with the government for mass adoption if they wanted to be licensed to operate their services to the citizens. But no way they would regulate DEXs.

Do you think scams are rampant because of lack of regulations? I don’t think so, although it is actual reduce some scams in terms of P2P but preventing hacks and scams, that cannot be solved by regulations or KYC requirements. If you ask me the sole purpose of this KYC is to checkmate the user and if regulated this data collected would be shared to the government entity there by defeating the one of the core purpose of bitcoin which is privacy. Yes the fall of many of these big exchanges will have a big negative impact on bitcoin and cryptocurrency adoption but that will just be for sometime before the dust settles down again and we move on.

The best precautionary measures to reduce the dependence on centralized exchanges is by using the decentralized ones. Ones many people start to use it, then the liquidity would increase. Also as the adoption and business accepting bitcoin increases so will the dependency on exchanges for P2P transactions will reduce

At some point, the central platform will grow to process millions of dollars, and so it must have a license, otherwise you will be considered to be laundering money. Therefore, as these platforms grow, regulatory restrictions are important.
But if we all turn to decentralized platforms, we will reduce the amount of data that the government and third parties know.

We all know the benefits of regulation is to prevent scams/illicit activities on these exchanges. Although, some countries regulations might be abnormal or too strict for some exchanges. But I think there are some top, safe and well regulated exchanges that still operate in most of these countries which Binance and some other Top exchanges cease to operate. So, I don't think crypto can ever fade away.

I think that mass adoption of bitcoin depends more of business being open to it and folks like us spreading the word about how to use it.

Think in the first trades done by humanity, how they learning to trade goods and services, how they adopt money until the point that every body start to using and work for it...

It's kind of like a domino effect, you know? People learned, taught others, and before you knew it, everyone was on board and using it in their everyday lives. That's how I see Bitcoin too – if more businesses start accepting it and more people show others how it works, it could become a big part of our financial world just like money did back in the day.

It is possible that an exchange will not be granted a license if issues are not resolved. We must normalize it since the authorities are solely concerned with for the sake of investors in their country. There have been numerous reports of investors being hacked or defrauded, and it keeps happening.

Besides, investors are also feel safe if the exchange is regulated and licensed. So, in those exchanges, they need really take care of their reputation so that their project may continue to work and grow in most countries.

Yes if mass adoption means everyone investing and trading in crypto because CEX and crypto companies do not have customer interest at heart. If it's about profit and customer safety we all know which they would choose, and I don't blame them that's all business not just crypto.

But if mass adoption is about using crypto the way it is, regulation doesn't help. Education only does that.

The cryptocurrency industry is currently at a critical stage and the role of exchanges can either "Make or Marr" the growth of the space.

Since 2009 till date, the industry has encountered a mouth watering growth with many institutional adoption of which Honda Motors is the latest to announce purchase of their product via crypto. Let's not also forget Elon Musk also accept payment of crypto for his Tesla cars and other big institution around the world also accept crypto as means of payment to obtain their goods.

This shows the world and future of crypto look promising but one area of particular interest that could potentially hinder this growth seems to be compliance by crypto exchanges to be regulated which of course I personally deem important because of the past event of scam from exchanges, hacks and collapse of some CEX which left investors in shambles.

The leading cryptocurrency exchange Binance which is supposed to take the lead in regulatory compliance seems to be having troubles with many countries already due to one regulatory issues to another ranging from licensing, operating within the legal framework of the country and compliance to regulation in general which have caused their exit from countries like United States, United Kingdom, Canada, Switzerland, Japan and others. Recently Bybit another top crypto exchange has also exited the UK market raising an eye brow about the readiness of this exchanges to extant laws that seek to protect the interest of users and investors.

If this turn of events towards rejecting to be regulated by countries persist, crypto might prolly fade away with time especially if some top exchanges are not operational in top countries like USA, UK, Canada, Japan and the rest.

What are your thoughts?