US reluctant on trusting cryptocurrencies, increases regulations.
August 13, 2018 12:10 pm,
With the growing demand of cryptocurrency, global regulators are on their toes to keep up with the regulations. Cryptocurrencies aren’t backed up by any kind of central government, which means that each country has different kinds of regulations and standards. Every regulation has affected the value of cryptocurrencies in this financial year of 2018.
It is pretty hard to find consistent legal approaches to cryptocurrency in the United States. Laws that govern the exchanges vary from state to state. Federal authorities differ in the definition of ‘cryptocurrency’. FinCEN (Financial Crimes Enforcement Network) does not consider cryptocurrencies to be legal tender. Since 2013 it has considered cryptocurrency as the value that substitutes for currency. In contrast, the IRS regards cryptocurrency as property and has released tax regulations accordingly.
In the month of March, SEC expanded scrutiny and said that it will apply securities laws to cryptocurrency exchanges as well as digital asset storage organizations called wallets. The agency is focusing on the initial coin offerings released through the fundraisers called token sales. The agency has stepped up the efforts to monitor them through subpoenas.
Although the prices of cryptocurrency have come down in the recent months, statements from the regulators reflect the acknowledgment of the technology of cryptocurrencies the future potential it possesses. In a statement issued by IMF, the appeal of crypto assets was acknowledged. A piece issued by IMF acknowledged the challenges faced by the cryptocurrencies currently, according to the issue, Cryptoassets are very volatile and risky and pose a threat to fiat currencies. Apart from that, citizens don’t trust cryptocurrencies the way they trust fiat currencies.
On July 2018 the proposal to trade Winklevoss Bitcoin Trust as an ETF was declined by SEC, SEC stated that it doesn’t consider the market for cryptocurrency to be resistant to the price manipulations. In the same month of July, Jerome Powell, Chairman of Federal Reserve stated that regulating cryptocurrency market isn’t a priority for the Federal Reserve and that the reserve does not view cryptocurrency as a threat to the financial system.