What to do with cryptocurrency assets is something governments around the globe have drawn blank on in the past. Some have incorporated them wholeheartedly with varying results, while others chose to ignore their use. Well now, a crypto task force sitting under the US Securities and Exchange Commission will be more than happy to formulate a framework that will establish the use of crypto in the US.
What Will The Crypto Task Force Do?
To mark the beginning of the head of the task forces term, she has been labeled as the crypto mom by many. As the fiat world continues to drag their feet along, she is heralding a sobering assessment of the thrust. For that, she will first have to face the anti-crypto camp, and for them, she is crypto-obnoxious.
The aim of the task force is to clearly define regulatory boundaries. To accomplish this, they have stated that it will be achieved by deploying enforcement resources judiciously. Furthermore, they hope to be a realistic and actionable method for registration. Processes for disclosure will also be comprehensively defined. Peirce is also not a fan of regulation by enforcement.
The outcome of this development in the USA is certain to affect the entire cryptocurrency industry. The United States is the world’s largest economy. Therefore, any changes in the regulatory framework will have a ripple effect across the globe. For instance, those who buy Bitcoin in Canada will be impacted by regulatory shifts in the USA. Given these developments, it is prudent for every investor to watch the United States closely.
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So What Could The Outcomes Be For Digital Assets?
People from various US government departments will come together for a meeting to discuss digital assets. The major stakeholders, such as the SEC, Treasury, and Homeland Security, must prepare their reports that cover existing frameworks for modifications to be worked on later. That means no more residing in the gray areas for the owners of digital assets. Penalties would be imposed on those unwilling to declare their assets. It is clear that the era of ambiguity has come to an end.
Traders could go as far as attempting to increase liquidity in international markets. Such loose monetary policy enables traders to deal more actively in currencies. But one should be prepared for variability. And, unlike crypto investors, having the markets on a volatile stance is not a new concept to traditional investors. This has always been the case.
If regulated more, the crypto markets in the long run could very well turn out the opposite: crypto assets may become more stable and reliable. This really depends on how one regards the value of Bitcoin.
How could it affect the worth of other cryptocurrencies?
A newly created crypto task force can certainly change how Bitcoin investments are viewed. At the end of the day, it all boils down to how you perceive the progress and future of cryptocurrency markets. The first one is that this is a step further towards the legitimization of Bitcoin. The creation of the taskforce demonstrates a belief in cryptocurrency as a legitimate investment class. As a result, this will lead to greater adoption. There are some who argue that this will only serve to increase the value of cryptocurrency.
This second train of thought is the opposite of the first one. The greater the incorporation of cryptocurrency into established financial systems, the more it totally loses its worth. Even the hybrid form has value capture through capital controls and regulated markets. It is decentralized. When it gets integrated into main stream finance, it loses this unique feature and becomes less attractive.
The adoption of stablecoins on the blockchain paints a very different picture. If there are ways of using these blockchains aside from retail, this strategy would serve to undermine the growth theory. But a new crypto taskforce indicates that the world is taking crypto seriously, and more will follow.
Conclusion
The establishment of the SEC’s new crypto task force marks a pivotal moment in the cryptocurrency landscape. As the U.S. government aims to create a clearer regulatory framework for digital assets, investors, businesses, and stakeholders must brace for significant changes. While regulation may introduce stability and enhance trust in the crypto market, it also poses challenges that could impact its decentralized nature and appeal.
