For many, the very term cryptocurrency brings up images of hackers and anonymous digital masterminds who use technology to gain a dishonest advantage over the rest of us.
While uninformed individuals may still believe this to be the case, major financial firms like Goldman Sachs, JP Morgan, State Street, and BlackRock have recently joined hundreds of millions of users worldwide in owning cryptocurrency positions.
In just 13 years since the revolutionary advent of blockchain technology with Bitcoin, cryptocurrency has seen a level of wide-based and institutional adoption that has not been seen before in the history of product invention.
However, the crypto space is still one of the greatest new frontiers in history, comparable to the old wild west. Some people believe that crypto needs to be settled with some new rules.
Pros of More Regulation
Rewards Bunny Co-founder and CEO Jacky Goh is one of those people who is advocating for cryptocurrency regulation on an international scale while also acknowledging the potential risks of doing so.
“The main idea of crypto regulation is to protect normal investors who are not yet familiar with the complexities of crypto investments,” Goh said.
Goh is currently the top executive at Rewards Bunny, a platform that offers users cashback in crypto or US dollars for online shopping through a wide variety of participating brands.
He believes that a set of international guidelines for crypto regulation will help force the advancement and development of blockchain technology at a much faster rate, improving the entire crypto ecosystem regarding value add and safety.
“I think we need a set of standard guidelines, similar to what the SEC does for US financial markets,” Goh said.
Because crypto companies currently do not know what the future holds for regulating their products, they are forced to spend time trying to decipher what is sanctioned between various countries instead of focusing on innovation, according to Goh.
Cons of Regulation
Goh believes some obvious risks come with regulation, citing the People’s Republic of China and its outright ban on crypto.
“It will definitely hamper the growth of blockchain technology if governments come down with heavy-handed crypto regulations,” Goh said.
Voices inside the broader finance and tech spaces are also wary of the cons that crypto regulation can bring about for the ecosystem as a whole.
“Stricter regulation would almost certainly hit prices in the short term -- partly because so many people are scared of it. The very idea of regulation has become somewhat of a bogeyman in cryptocurrency circles,” said Emma Newbery of the Motley Fool.
Bitcoin, the first cryptocurrency and one of the original applications of blockchain technology, was created in the wake of 2008 and the financial devastation left by the global recession. Its creation was a reaction to the failed international system of central banking, which put the world economy on risky foundations.
Centralized regulations will force the crypto industry to operate more like the banking industry, which would threaten the autonomous nature of decentralized finance and potentially revert crypto into mirroring the very system it set out to improve upon, According to a report by Tech HQ.
Jacky Goh sees the need for regulation in a different light.
Why Crypto Regulation and International Guidelines
After years of being a top founder and chief technical officer in the startup and gaming spaces, Goh’s journey into the realm of crypto began in early 2021 when he first started attending pre-issue launches for new coins.
“I got to learn a lot about the ecosystem this way, but I began to realize underlying issues,” Goh said.
Goh says there is a gray area regarding the launch of new tokens, such as scams where investors have lost their capital to unscrupulous crypto projects.
“Governments still have a tough time trying to regulate crypto because it can be used for both good purposes and bad purposes as well, but of course that happens across any financial system, be it traditional or crypto,” Goh said.
According to the Rewards Bunny CEO, crypto regulation is a complex issue internationally due to the differing perspectives of national governments and their leaders, who may or may not favor crypto.
“Regulation could come in a structure like the IMF, where leaders from different countries can sit down to discuss policy approaches and build a better ecosystem where regular investors are protected from bad actors,” Goh said.
When creating a crypto regulatory entity, Goh says it is important for government officials to consult experts with computer science and engineering backgrounds due to the level of technical variation between blockchain networks.
“Anyone who tries to make a policy without understanding or experiencing the whole crypto ecosystem will have an extremely difficult time coming up with proper regulations,” Goh said.
According to Goh, one foundational guideline for regulation at the national level would be establishing a Know Your Customer(KYC) system. KYC is a standard practice in the banking industry and can be integrated into the crypto ecosystem by registering digital wallets.
“If there is harmony between regulation, technologists, and government agencies, then they will work hand in hand to grow future blockchain innovation,” Goh said.
Along with Goh’s base of operations in Singapore, he says nations like the US and the UK are hotspots for future blockchain innovation. Additionally, Goh cites India’s vast and nearly untapped pool of talented programmers as a specific reason for its bright future in the crypto space and its potential role as an example for regulatory policy.
The Future of Crypto
While there will always be disagreements regarding the need for a global regulatory agency for cryptocurrency, one thing everyone can agree on is that changes are coming.
Ready or not.
What those changes will entail remains to be seen.
Join our community of fun crypto brains and grow yours too!