How will cryptocurrencies be regulated under Biden?By robertslaw, In White Collar Crimes, 0 Comments
President Trump was “not a fan” of cryptocurrencies, and his advisors and appointees often felt the same way. President Biden, on the other hand, has nominated people who are more favorable to blockchain transactions.
One is Gary Gensler, a former Goldman Sachs banker and financial regulator who has been tapped to head the SEC. According to Entrepreneur magazine, he teaches a class on digital currencies at the MIT Sloane School of Management, so he is well versed in how cryptocurrencies work and how they are regulated. His appointment could lead to more educated or even favorable regulatory treatment.
How does regulation affect cryptocurrencies?
Recently, Vertex.Market, a peer-to-peer cryptocurrency platform, reported on the effect of regulations on the performance of digital currencies. The report was published in the journal International Business and Finance.
On the whole, the group determined that any new regulations would tend to hurt the price of digital currencies like Bitcoin. Specifically, it found that anti-money laundering regulations and revised exchange regulations resulted in a reduced value for Bitcoin and other cryptocurrencies. When there were fewer regulations, the currencies rose in value.
Yet cryptocurrencies are still young. It’s likely that there will be more regulation coming, not less. The
Biden administration’s greater familiarity with the nuts and bolts of cryptocurrencies is a positive sign, but those seeking to rein in illicit transactions will still have their hearing.
Some regulatory changes may result in a lower value. Others may boost the price. Without greater detail as to what precise regulations are being proposed, it will be difficult to predict what will happen.
In the meantime, traders and others involved with cryptocurrencies should focus on compliance with existing law and addressing any vulnerabilities to illicit use of digital currencies. This should help address regulators’ concerns.