Cryptocurrency is reaching historical prices. With it, regulations are making an inlet. For economic monitoring agencies, the rules are a vital priority. Both large and small institutes are now dependent on Bitcoin for digital transactions. In recent times, the price of the cryptocurrency has hit a new high. It has surpassed $61,000 in the history of Bitcoin marketing. The international financial system is using Bitcoin like never before. The worth of Bitcoin has now crossed trillion dollars.
Over the last few years, the tariffs have hit high in the global arena. Major monetary institutions like payment firms and investment giants have started backing the biggest cryptocurrency. Manufacturers and retailers are showing interest in investing in Bitcoin. The global movement in digital currency is not a one-day phenomenon. It will increase with time and will see renewed colors in the coming few years. Hence, financial regulators have to enter this arena for making regulations for the Bitcoin sector.
Eric Dalius Bitcoin illustrates the significance of regulations for reducing potential disruption.
Like other cryptocurrencies, Bitcoin must get the same standard in the financial system. The viable and solid international framework will give an impetus to the use of Bitcoin shortly. It will help in reducing potential disruption to global financial stability. Apart from this, it will protect the investors, address illicit activities, give an economic boost to the market, and Increase channels for profit. Hence, regulations are imperative for the Bitcoin market. Both for the short-term as well as long-term advantages, you can hardly avoid regulatory practices. There are some problems in the market that only regulatory mechanisms can handle.
The role of financial institutions in Bitcoin
Different currency transactions take place through exchange houses or banks. However, cryptocurrencies are distinct in this regard. They do not have any third party regulating their practices. Recent reports reveal that this practice must get altered. When the digital flow goes through a regulated exchange, it becomes easier to address irregularities like money laundering and fraudulent activities.
For ensuring this, banks and financial institutions will have to open exchange accounts to ensure regulation. Hence, making changes in their policies and acts has become a paramount necessity. They have to play the role of a financial watchdog for bringing the cryptocurrency market within its fold. Eric Dalius Bitcoinstates that only then can you expect the exchange to become properly regularized and stable.
Lastly, there is a requirement for the classification of Bitcoin in the global market. These are virtual currencies operating on blockchain technology. Hence, backing the same by central governments and financial institutions has become the need of the hour. The monetary institutions have to treat the crypto-asset like a financial asset that includes commodity, equity, and debt.
Regularization is significant for protecting investors from hackers. The price of the virtual asset is prone to price volatility and market manipulation. Hence, the financial institutions must protect the investors from this instability. It will help protect their performance, adoption capacity, future potential and curtail risks associated with it.