You see, governments are predictable. They control a part of our life, and they are very important for the future of our society, and yet they are predictable. Whenever you look at the governments of developing countries, 95% of the time, they would always follow whatever popular in the developed countries and implement similar policies – although everything is still based on local cultures. For example, if a socialist country believes in internet censorship, other socialist countries might take a clue from it and also do some kind of censorship.
In relation to cryptocurrencies, however, things have been moving very slow when it comes to regulation. Every country has different beliefs, and they rarely enforce their own crypto regulations. But things have changed a lot. It’s no longer the same as it used to be. Many government officials started to notice that the crypto industry has been growing this year when most other industries are suffering. This is probably the year where they finally take some action on enforcing crypto regulations (or creating laws around it).
Governments Want Their Share Of Money
If there’s one thing I have learned from the crypto community, it’s that many of them have a very skeptical point of view when it comes to governments. Unlike the outside world, where some people can be very supportive of the ruler or opposition, in the crypto space, most of them rarely believe in their own government despite the fact they might not believe in the opposition as well.
Many crypto supporters are libertarians without much political stance on social justice issues. They are, however, very passionate when it comes to fiat currency manipulation and talks around the central banks. It’s understandable, though, as most people would agree to a certain degree that printing money to solve economic problems would only cause more long term problems for the society (and that’s exactly what the Federal Reserve has been doing).
However, despite the fact that crypto community might hate governments or central banks, they are fully aware that they can’t run away from them. In fact, they understand that taxes are unavoidable and will always be part of their life, even if they get rich from this crypto industry where there are not too many laws around it.
You see, if there’s one certain prediction about government, is that they always want their share of the money. Be it from crypto or other industries. So, you can imagine when there are some crypto exchanges or projects where they make huge amount of money but they only pay a very simple income tax. Governments don’t like it. And when these projects make even more money than ever before, governments pay more attention to them. This is when the enforcement comes in.
Possible Future Crypto Regulations
So, what kind of scenarios might play out in terms of crypto regulations in the future? It’s quite simple. In most western countries, I can imagine that cryptocurrencies would be massively accepted, legalized but heavily regulated. Many newer crypto projects won’t be able to create new startups as easily as now and they will face very tough restrictions from the authorities due to paranoia regarding “money laundering” and all that.
In the eastern countries, we already know that it’s a bit mixed here and there. In China, for example, public cryptocurrencies like Bitcoin would remain to be banned in the foreseeable future. On the other hand, the same authorities will promote their own blockchain solution to promote their digital yuan. In some other eastern countries like Japan, cryptocurrency regulations will be heavier than ever before but I do predict they will still be less regulated than the U.S. or EU.
There are also developing countries with a very grey area of crypto regulations. In Indonesia, for example, cryptocurrency trading is already legal. However, it’s also very ambiguous, as many foreign crypto exchanges are getting banned slowly but surely without notice due to them not having physical representation in the country. In Nigeria, crypto regulations are also starting to become a thing, but the laws are also still very vague.
While nobody can fully predict how the regulations will be in the future, I can see that the crypto industry will be very politicized if it keeps growing while the trade war (between the U.S. and China) keep escalating at the same time. Let’s see!