Is there a need for regulations in the field of cryptocurrencies?

Are regulations needed in the crypto world? How are they considered? cryptocurrencies to be able to regulate them?

First, are regulations necessary to protect the investors and users of cryptocurrencies? There are those who say that the lack of regulations has allowed the frauds and scams in the crypto world, with great losses on the part of investors.

It is then assumed that, with clear and consistent regulations, it would be possible to establish security and protection measures.

Second, the security framework that regulation would provide would help foster the adoption of cryptocurrencies globally.

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In third place, regulations could prevent tax evasion and other financial crimesan issue that interests states that believe that some people use cryptocurrencies as a way to evade taxes and carry out illegal transactions.

But let’s see if all this is so or if there are different opinions. Martin Gonzalez, CEO and co-founder of BAG -blockchain technology company that offers tools specially designed for art and culture- considers that just because a technology promotes decentralization, freedom and privacy does not mean that it does not need regulations. “Not to curtail freedoms but to put a legal framework agreement that allows sanctioning illegal acts”, says González.

for his part William EscuderoRegional Manager of CryptoMarket -cryptocurrency exchange platform-, believes that in the case of Argentina, it does not seek to collect more, but rather create a security framework given the context and what happened in 2022 with the collapse of various crypto companies around the world.

“What is sought then is raise the bar at which various platforms operate and that is why it is important that regulation comes hand in hand with knowledge so that progress can be achieved. Otherwise, a problem will be generated not only for the end user, but also for the information regimes, the dynamism between the public and private sectors, and the healthy growth of the market”, he asserts.

Keys to be considered by the States

From Koibanx -leading company in financial tokenization using blockchain technology- Francisco Mayorwho works as CFO at Koibanx, provides a detailed overview: “The regulation of the crypto industry is at different levels of progress in Latin America.

However, there is a common element in the different countries of our region and that is that the speed with which the regulator is operated is not compatible with the advances in technology and its applications in the daily life of people.

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In this sense, he lists some challenges involved in legislating for the crypto ecosystem:

1. It is advisable to legislate on the principle and that it is not intended to legislate on the specific application of the technology. In the event that the regulator wants to legislate on the latter, there will be a high probability that the regulation will expire in a practical sense, because the crypto ecosystem and blockchain technology in general is in constant development.
2. Legislation should be sought that is comprehensive and that it covers not only aspects related to cryptocurrencies, but also other sectors that are related to the crypto ecosystem and that today offer different solutions and implementations that impact the daily life of people and organizations. Currently there are great opportunities related to the development of the industry and there should be a clear and comprehensive legal framework that pays for this growth to be constant, stable and organic.
3. The establishment of specialized institutions should be incorporated in the legislation and with a high technical level that serve as coadjuvants to companies in the crypto and blockchain sector in the creation of products and services that maximize their level of security and guarantee for users.

According to Ramiro RaposoCountry Manager de Bring it on -the pioneer platform for payment of fees in cryptocurrencies and digital dollars most chosen by workers, freelancers and service exporters-, Argentina is very particular: “Although there is talk of regulations, it is of the utmost importance that those who are in front of this project in the government are trained and advised to understand the crypto market. Due to the history of our country, I would suspect that the only reason is to take advantage to add more taxes, but since the ecosystem is much more complex and decentralized than the traditional market, they will never obtain full control over them”.

In any case, Raposo agrees that it is always necessary to have some kind of regulation or action framework.

*Director of Arigatō Consulting

LM