Cryptocurrency News

Why Crypto Exchanges Are Asking For A New Regulator

Over recent months we have seen the world of digital currency expand, largely down to how accessible it has become to the everyday person on the street. Now thanks to a large number of Cryptocurrency exchanges opening up, buying digital currency is as easy as joining an online casino to enjoy a game of roulette. There are people that would argue something so serious shouldn’t be as open to everyone, after all, is investing in cryptocurrency any more reliable than betting on what number a ball will fall on when the roulette wheel spins?

The Regulation of Crypto Exchanges

As it stands, across much of the world there is very little regulation of Cryptocurrency and Cryptocurrency exchanges. This is because digital currency like Bitcoin is not a legal tender and hasn’t been issued by any financial authority. However, with more and more people starting to become interested in buying, selling and trading cryptocurrency there has been some call for regulation of exchanges to happen.

Over recent days Hong Kong has announced plans to only allow licensed companies to operate Cryptocurrency exchanges. As a result of this, they will also only be allowed to provide any Cryptocurrency services to professional investors. If this happens and goes well Government bodies and financial regulators across the globe will likely follow suit in similar ways.

Why Is Cryptocurrency Regulation Needed?

In a similar way to stocks and shares, or even online casinos it is important to know how much money is being spent within a country. Not only that, but it is important to know who is spending it and how much they are spending. Lots of the economy relies on knowing how money within a country is being used. With no regulation, Cryptocurrency doesn’t get traced in this way and therefore there is nothing for the country to look for.

On top of that, if there is no regulation then people could use Cryptocurrency exchanges for money laundering and this is most certainly something that any financial body will want to avoid. By introducing regulating bodies to look after Cryptocurrency exchanges, these can be better monitored to ensure that this does not happen.

Lastly, the safety of people’s investments is essential. Although no one can guarantee that an investment in Cryptocurrency will be profitable, anyone that does choose to invest in one deserves their money to be safe. For example, when someone uses an online casino they know that their chances of losing their money are high, but they also know that the casino will do what they say they will and let them play games rather than just pocketing the money and not offering any services. In theory, there are no regulators that would stop someone from opening up an exchange but not investing people’s money, therefore the people who have made investments are being tricked into parting with their money for nothing – and this is most certainly those that are in favour of Cryptocurrency exchanges being regulated are in favour of.