Regulations to cover activities related to cryptocurrency are evolving and they appear, to be fairly similar to existing laws related to conventional money and banking. This is obviously much more than a simple coincidence. To understand the logic behind laws related to cryptocurrency exchanges, it is important to review the evolving 'behavior' of cryptocurrency.
We are seeing crypto enter the domain of money. Payments are being increasingly made through cryptocurrency. VISA the leading card issuer has gone pro crypto, cards in some regions can now be funded using cryptocurrency. Paypal the leading online payment service provider, now allows trading in crypto. Paypal balances would include cash and cryptocurrencies. These are good examples of how consumers, could use fiat money and crypto interchangeably to fulfill their payment obligations.
It is not just about crypto leaning towards fiat money, things are happening the other way around too. Conventional banks are showing a keen interest in cryptocurrency. This can be seen by the increasing number of banks, seeking permission to include crypto activities in their business operations. DBS Singapore's leading bank is on the verge of launching a crypto exchange - the formalities would have been completed, at the time of publishing this report. It is quite obvious that this trend has just begun, it is bound to grow as banks refuse to be left out of the crypto action.
Cryptocurrency exchanges are the starting point of all crypto activity. Authorities realize that much can be tracked and monitored at this point. Both FATF (Financial Action Task Force) and AML (Anti Money Laundering) regulations are well known in the real (as distinguished from crypto) financial world. These laws are aimed at blocking the flow of funds to money laundering and terror funding activities and include, a range of measures and regulations that need to be implemented. As the gap between cryptocurrency and conventional money keeps decreasing, it has become necessary to monitor crypto activity on par with similar activities that are conducted in the existing monetary system.
The crypto industry needs to view crypto laws in the right perspective. Cryptocurrency can do much more for the global economy if, its activities are transparent and officially recognized. We are on the right path, some may disagree but operating with no controls and norms will limit the scope and effectiveness of cryptocurrency.
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