Cryptocurrency has always been in the limelight since its launch. This investment model gained massive attention in 2009 with Bitcoin entering the global market. Along with Bitcoin, several other tokens entered the investment market. Today, there are more than 14k tokens gaining investment attention. Additionally, the market volume of cryptos has increased to $3 trillion. You can also learn more about cryptos on BitProfit.
Every cryptocurrency is backed by the blockchain philosophy and decentralized working model. It means the transactions are undertaken eliminating central banks. The tokens are transferred over the internet. The sender and recipient only need a digital wallet to complete each transaction. The recipient can choose to hold the funding. The role of central banks comes into effect only when an investor decides to liquidate their holdings. Another attractive feature is the blockchain working model. These blocks are stored in the form of chains. Each of these blocks is assigned individual user credentials. These blocks are hosted on the public network. The admin users in the network control the flow of information and access privileges.
Regulations around cryptocurrencies
There has always been debate around the use of cryptocurrencies. Many investment experts suggested that this investment model is a threat to the economy. Since no central banks control the flow of tokens it is impossible to predict the volume of investment.
Additionally, the crypto market is always volatile. The price fluctuation always hit the roof with changes occurring every hour. Since the tokens are traded 24*7 the prices of tokens keep changing.
Understanding crypto regulations in the US
The US continues to progress on digital currency and its economy. The Financial Crimes Enforcement Network in the US has still not accepted crypto as a legal tender. However, the US government has been open about crypto investments. The country has been looking at various opportunities to better manage cryptos.
The crypto exchanges are legal in the US. Every crypto exchange goes through a rigorous licensing process before starting its operations. Every crypto exchange provider must complete their registration process to undertake operations. On the other hand, the Securities and Exchange Commission in the US considers crypto as securities. Whereas the CFTC in the US considers Bitcoin as a commodity.
Understanding crypto regulations in the UK
Like the US, there are regulations around crypto tokens and their usage in the UK as well. The government has not initiated a complete ban on the investment model. The Financial Conduct Authority (FCA) has developed regulations to monitor crypto tokens. Efforts have been taken to monitor crypto’s investments against money laundering. There are also efforts underway to ensure crypto tokens are not used for terrorist activities. Every crypto exchange interested in operating in the UK needs to obtain a license through FCA.
The FCA regulations put forward multiple parameters before allowing any investments. The KYC is mandatory for every customer who undertakes an investment. The crypto exchanges have made it mandatory for every user to update their KYC. Irrespective of the volume of investment, the KYC becomes mandatory for every investor.
US and UK coming together to regulate cryptos
Yes, you heard it right. This is the hot news in the investment market today. Both countries have announced their partnership to review and develop crypto regulations. The US department of treasury made an announcement last week about this partnership.
A meeting to conclude and arrive at a decision was conducted on July 21. Representatives from both groups were present during the meeting. There was also representation from various regulatory agencies of both countries.
The meeting also made way to explore the concept of central bank digital currencies. Along with cryptos, the working group discussed various tokens including stable and NFTs.
All participants and other representatives committed to providing continued support. The group aims to regulate cryptos and provide a safe investment environment. The group will also work to strengthen regulations.
Nikhil Rathi, CEO of FCA announced that both countries will deepen their ties. Both governments will work to ensure that there is collaboration at every step. It will allow bringing more clarity to regulations in both countries. This partnership will also provide to promote a safe investment environment. The future generation will find it easy to invest in cryptos.