Can Regulations Affect Bitcoin?

March 11, 2019, by nadav
Bitcoin regulation is a hotly debated topic, with good reason: cryptocurrency advocates hold financial freedom as an essential value, and
bitcoin regulated

Bitcoin regulation is a hotly debated topic, with good reason: cryptocurrency advocates hold financial freedom as an essential value, and regulatory restrictions may well pose a threat to that principle. Luckily, regulations are much more favorable toward Bitcoin than they are often made out to be.

Who Regulates Bitcoin?

Nobody regulates Bitcoin, although many have tried. News stories often feature sensationalized tales of crackdowns in China and other countries; however, effective bans and restrictions are fairly rare. In fact, many people are actually using Bitcoin to evade regulations that deny them financial services—although of course the situation varies from place to place.

Some products and services are, however, making an effort to cooperate with regulators. Specialized Bitcoin trading platforms such as Bakkt are working diligently to obtain regulatory approval. These platforms may hold appeal within traditional and institutional finance, and  gaining certain types of regulatory approval could be a ticket to mainstream success.

Additionally, some regulations are broadly applied, but are beneficial to investors. Bitcoin exchanges like Jubiter conform to certain regulations in order to ensure that they are providing a safe and trustworthy service to their customers. Compliance with KYC regulations, for example, ensures that a service is not being used for fraudulent purposes.

So, Is Bitcoin Regulated Anywhere?

The regulatory landscape can basically be summed up as follows: Bitcoin itself is not regulated, but some of the services that have grown around Bitcoin are regulated. And even though many Bitcoin projects willingly comply with regulations, there are just as many Bitcoin projects that are able to avoid regulations entirely.

The bottom line is that regulations cannot be used to suppress Bitcoin at the most basic level. Since Bitcoin is operated by a widespread network of users and miners, there is no single entity that anyone can actually shut down—and very few governments wish to shut down Bitcoin to begin with. In other words, Bitcoin is here to stay.

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