The cryptocurrency world has been increasing its presence in the society. Initial Coin Offerings have also been expanding as well as different cryptocurrencies. Enterprises, businesses, investors and individuals have been involved in this exciting market. Governments have been analyzing it trying to decide whether to implement regulations or not. International Monetary Fund (IMF) chief Christine Lagarde, said that it is only a matter of time before cryptocurrencies become regulated.
Christine Lagarde Believes Governments Will Regulate Cryptocurrencies
During an interview with CNNMoney Christine Lagarde has commented that cryptocurrencies will be regulated sooner or later.
“It is inevitable. It is clearly a domain where we need international regulation and proper supervision,” she said. Furthermore, at the World Government Summit in Dubai on Sunday, she explained that cryptocurrencies are involved in dark activities including. This is not the first time that cryptocurrencies are linked with criminal activities. Bitcoin has been used in the anonymous dark net marketplace known as Silk Road.
Lagarde has also said that the IMF is working hard in order to prevent cryptocurrencies from being used to launder money or criminal activities like terrorism. Besides that, she argued that regulators should regulate the activities around cryptocurrencies and not be focused solely on entities.
China has decided to completely ban cryptocurrency trading and Initial Coin Offerings (ICOs). South Korea has also banned Initial Coin Offerings from settling in the country. ICOs have raised almost $4 billion dollars during 2017. The main problem is that there were several ICOs that were completely scams. They stole the funds from the investors and the owners disappeared.
Regulations may create a more legitimate cryptocurrency market. If there are scams, the owners would have to pay for it and give back the funds to the investors. The society would be protected from fraudulent activities and scams. That’s one of the main reasons why the famous social network, Facebook, has decided to ban cryptocurrency and ICOs ads.
Worldwide Cryptocurrency Regulations
The world is going to discuss cryptocurrency regulations. Several Finance Ministers from different countries marked the agenda for the next G-20 summit that will be held in Buenos Aires, Argentina.
U.S. Treasury Secretary Steven Mnuchin, said last month at a conference in Davos:
“We encourage fintech, we encourage innovation, but we want to make sure that all of our financial markets are safe and aren’t being used for illicit activities.”
Taro Aso, Japanese Finance Minister said that there is no fixed definition on whether Bitcoin is a currency or not. Additionally, he said that he needs more time to analyse it.
In the Netherlands, the Authority on Financial Markets (AFM) warned Dutch people about the risks associated with cryptocurrency investments. About ICOs, the AFM expressed its concerns explaining that the risks of investing in them are greater than the benefits.
“Effective regulation of virtual currencies would therefore only be achievable through the greatest possible international cooperation, because the regulatory power of the nation states is obviously limited,” commented Joachim Wuermeling, director at the Central Bank of Germany during an event in Frankfurt.