Bitcoin

The Times of Unregulated Cryptocurrencies Are Coming to an End

The Times of Unregulated Cryptocurrencies Are Coming to an End

The era of crypto ‘Wild West’ will soon live only in our memory, argues Julie Myers Wood, CEO of New York-based security and compliance-related investigation firm Guidepost Solutions. Speaking to Asia Times, Ms. Wood claimed that regulators are taking an increased notice in digital assets, as an increasing number of institutional investors look to enter the crypto market.

Prior to being appointed CEO of Guidepost Solutions, Ms. Wood held a number of high-rank positions in a number of key US institutions, such as Department of Homeland Security or Department of Justice. This meant that she played a major role in developing numerous high-level crisis management plans and therefore offers excellent perspective and insights into the regulator efforts to control the budding industry.

Wood is particularly interested in the recent rise of stablecoin offerings. She said there are more than 50 stablecoins being developed right now, with Tether (USDT), currently the 8th-largest cryptocurrency, being the most prominent of the bunch. However, USDT has often been criticized for lack of transparency and new competitors are starting to emerge with stablecoin projects by companies such as Gemini or Circle.

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The fresh stablecoins serve as not only a liquidity tool for crypto exchanges but also include features like insurance or loans. According to Wood, “With the development in new stablecoin products, regulators are increasingly focused on stablecoin offerings, as more and more persons become active in the retail market for crypto-currency.“ She also believes some of the stablecoins will surely die, especially those failing to comply with the US Government.

Wood also says regulation will only increase as lawmakers start to adapt old laws to the new technology. SEC has recently come under criticism from the crypto community due to the fact it still uses a Supreme Court ruling from 1946 to determine whether an asset is a security or not. However, intertational bodies such as the Financial Action Task Force (FATF) are increasingly getting involved in the digital asset industry, which is good news for the crypto sphere. FATF is a global organization that can exert significant influence on its member states.

According to Wood, “It is important that bodies like FATF continue to be involved in the setting of global standards since the regulatory framework in many countries is extremely underdeveloped and/or lagging behind the evolution of the cryptocurrency market.“

The security expert also points to innovations in KYC (know-your-customer), KYT (know-your-transfer) and AML (anti-money laundering) technologies, which will allow regulators to efficiently keep track of increasing number of transactions. The crypto craze might be over but the industry and mass adoption is steadily growing, forcing regulators to keep up with the rapid pace.

Pressure to prepare for the ‘rising tide’ of crypto might come from FATF, who will force its members to comply with global standards. Wood argues that US could also be “a source of both regulatory resources and guidance from all of the various agencies that dabble in the space.“

Come what may on the regulatory front, there is a future for digital currencies. This is a sentiment of CFTC Chairman Chris Giancarlo, who claimed that “cryptocurrencies are here to stay” earlier this week. The industry is developing at a staggering pace despite the bearish market throughout the year. Now the time has come for regulators to step up their efforts and enable the institutional money influx crypto sphere has been desperate for.

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