The year 2020 is likely to be one of the most eventful ones from the ‘crypto angle,’ i.e., from the perspective of cryptocurrencies as important changes are likely to take place. These are anticipated in the field of cryptocurrency regulation as regulators have reached some degree of consensus over measures related to cryptocurrencies. The blockchain industry has always been undergoing some change as it is a dynamic sector, with governing regulations being frequently amended. This is because being a relatively new industry, the needs, demands and associated interventions have been continuously modifying themselves. Few of the important legislation updates till now have been-
- Increase in the number of Crypto-Positive Regulations–
Many regulations have been passed by governments and global institutions, which are increasingly in favor of crypto adoption. The USA, for example, has put forward the ‘Blockchain Promotion Act, 2019’, legislation that would mark the potential users of blockchain in government agencies., ‘National Defense Authorization Act’ has been another such bill, as one of its sections highlights blockchain-based applications for the US military which need further research by the defense department. The SEC has also shown some support towards cryptocurrency use as real-world assets, which would likely augment capital inflow into the crypto markets, as regulations would be eased. Similar legislations have been passed in other parts of the world, although there is a long way to go amidst concerns of security, privacy, etc. yet the general attitude towards blockchain technology is becoming positive.
- Growing Market Involvement–
The fintech and other associated service sectors have almost touched the $4.8 trillion mark in 2020, and cryptoassets are expected to experience a further rise as giant corporations are gradually opening up to this technology. Like “Coinbase being accepted as Visa’s principal member.” Although with some degree of skepticism, banks have also taken to use blockchain, at least for a few functions, like increasing the accessibility of financial products and some other services to users. With individuals and corporates also accepting fintech services over conventional banking services, banks will gain additional revenue, which has also made it a good investment option for retail investors.
- Transparency to Heighten Adoption–
Blockchain technology is decentralized in nature, which makes it transparent and makes AML/KYC compliance hassle-free. Maintenance of financial records and audits becomes easier as records kept cannot be changed or tampered with. This has resulted in blockchain adoption in areas of asset tracking, where verification and updation of information is a necessity. Tracking of assets from delivery to arrival with complete accuracy will become possible and this would also benefit other areas like loans, purchase, identity verification, etc..
- Emerging Economies are Rapidly Warming Up to Cryptoassets–
Economies like Malaysia and South Africa are growing crypto-friendly and embracing digital currencies. Several fintech solutions had become successful in the developing economies before they became popular on the global stage. Millennials have grown inquisitive and innovative w.r.t. this technology as there is a lot of scope for exploration. Adoption of blockchain technology coupled with proactive steps taken by these economies, can also encourage developed countries to do so.
- Need for Blockchain Monitoring–
Regulators still retain some concerns regarding blockchain and its misuse for illegal activities and money laundering. Companies have been provided with guidelines as to how they should regulate their blockchains or else they would have to risk fines or even restrictions on operations. The guidelines help in averting thefts, illicit activities, and other potential crimes, which may harm the best interest and reputation of the organization. Several other factors make 2020 a much anticipated year for cryptocurrencies; few of them are- institutional investing, where global investors, traditional asset managers come into the scene, rise in bitcoin derivative trading. For trading Bitcoin with more profit, click here to get the best tips for trading cryptocurrencies. Availability of Automated tax-loss harvesting, changes in market structure, and growth in the lending market increase in third party custodians and banks adopting more crypto-friendly measures. “USD Stablecoin market cap and volumes accelerate,” an increasing number of international stablecoins, innovative developments in crypto, the evolution of emerging markets and so on. Many countries have also passed legislation recently, w.r.t. the operation and regulation of cryptocurrencies like South Korea, which is one of the first nations to pass comprehensive cryptocurrency laws, China, USA, etc. Therefore, the year 2020 is bound to be an eventful one for cryptocurrencies bringing them increasingly at par with traditional currency.