Ripple Asks UK Government To “End the Wild West Days,” Introduce Regulations
Owing to the “Wild West” days- meaning no laws or regulations present – of the cryptocurrency market, Ripple, the world’s third largest digital currency, has encouraged the British regulators to follow Japan’s example of the implementation of new rules to end any crypto-frauds.
Crypto-Markets Need Regulations
The UK regulators were asked to maintain a balance between “capturing risks and enabling innovation” by the head of regulatory relations of Ripple, Ryan Zagone.
The three most important backers of lawmakers to be aimed at regulation were highlighted by him, namely; consumer protection, anti-money laundering and financial stability.
Zagone informed that the cryptomarket is at the stage now where it needs a lot more clarity and rules in place to ensure certainty and reinstate trust in it. He also mentioned that it was a reasonably favorable to start using the ‘wait and watch’ approach practiced by regulators.
Zagone’s statements were in regards to the comparison of the regulatory environment of cryptocurrency to the early days of the internet.
Japan’s Regulations An Example For Other Countries
Zagone deemed Japan to be a “leader” and stated that it could be used as an example and blueprint for other countries including the United Kingdom.
In 2017, Japan completely overturned its rules on cryptocurrency by launching and enforcing laws to protect consumers from cryptocurrency crimes and making it mandatory for cryptocurrency exchanges to adhere to anti-money laundering regulations.
But, the process of revamping rules to include newer crypto-assets has not shown a lot of progress in the United Kingdom.
In March 2018, Chancellor Philip Hammond unveiled a new taskforce to help safeguard consumers and included representatives from the Treasury, the Bank of England and financial watchdog the FCA. He stated that this task force could enable the UK to “manage the risks around crypto-assets.”
In contrast, Mark Carney, the Governor of Bank of England, warned that Bitcoin, along with other kinds of cryptocurrency are in line of facing a regulatory suppression, claiming that all of them were seen as the “hallmarks of a bubble.”
However, Zagone compared new regulations to the “guardrails on the highway” that allows new players in the market to enter in, and specifically more of institutional investors.
Retail Investors Most Affected
It is said that retail investors have suffered significant losses in the cryptocurrency market, owing to its ever-so-oft rise and fall. To put this into perspective, the crypto market has seen an indelible rise to the peak of more than $19,500 (£13,700) in December 2017, before falling down to $6,600 in March 2018.
In the absence of regulations, the market is heavily manipulated by ‘whales’ – investors with enormous holdings of digital tokens – and computerized bots, which buy/sell large amounts of cryptocurrencies in short periods.
Regulations will go a long way in making the market more attractive for retail investors while creating an optimum environment for growth.