There is a lot of discussion regarding whether or not Bitcoin needs to be regulated. Cryptocurrency enthusiasts will say there is no requirement for doing so, whereas government officials and policymakers would like nothing more than to tightly regulate Bitcoin.
Innovation Should Not Be Put On A Tight Leash
Now that various countries in the world are focusing their attention on pushing FinTech innovation, it only seems normal they would take a more active approach towards Bitcoin and the blockchain. However, that does not necessarily appear to be the case, as many people still condemn Bitcoin for making financial services accessible to people all over the world without oversight or regulation.
There is a particular advantage to Bitcoin regulation, assuming it is done right and leaves enough room to keep on innovating. Proper and open-minded regulatory requirements will give Bitcoin more legitimacy, as the claims of cryptocurrency not being regulated would become moot. After all, something that is regulated can never be used for nefarious activities, right?
Moreover, some consumers may feel they need to be protected when it comes to Bitcoin, even though that is impossible by default. Since no one exerts control over finance, there is no one to offer protection, let alone customers who can benefit from hand-holding. Nor should there be, to be fair, as full control over finance has its perks and responsibilities.
At the same time, too severe regulation will have an adverse effect. Companies in the US, who used to operate in New York, will remember the days of BitLicense, which forced a lot of them to stop offering their services in that region. Hopefully, that type of approach will be more of an exception rather than the norm.
In the end, it all comes down to how regulatory frameworks will look like, and what they are trying to achieve. Exchanges complying with more thorough user documentation and verification might be somewhat acceptable, but it will be a fine balancing act. Linking identities to Bitcoin wallet addresses and transactions, on the other hand, should never be discussed to begin with.
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