The 10 Biggest Myths About Cryptocurrencies - Part 7

In the series "The 10 Biggest Myths About Cryptocurrencies", let's take a closer look at the 10 most widely used claims about cryptocurrencies and their opportunities and risks. In doing so, we will daily explore a new myth and check it for accuracy.

Myth 7: A regulated trade in cryptocurrencies is not possible

Over the last six months, the regulation of cryptocurrencies has become one of the central, if not central, issues of blockchain. As a response to the growing popularity of cryptocurrencies on the one hand, and the proliferation of cryptocurrencies by countless ICOs on the other, more and more countries around the globe are now urged to think about regulatory measures and create conditions for this growing sector ,


A cryptocurrency as a non-physical, decentralized digital currency naturally presents challenges for central banks and financial regulators around the world. Especially in many legal aspects, the emergence of cryptocurrencies creates precedents that can not easily be classified in the existing legal framework.

About the various manipulations of the regulation of cryptocurrencies was already written in the second part of this series. If one ignores radical measures of crypto regulation, above all practiced in China, then in the majority of cases constructive approaches on the part of the state can be identified.

One of the most brilliant examples at this point is Japan. At the beginning of October, a wide-ranging regulatory action created measures to enforce a law regulating digital currency exchanges. Rules were adopted to prevent cryptocurrencies and their trading on stock exchanges being abused for money laundering and thus being involved in criminal activities. In addition, the Know Your Customer (KYC) principle has set a standard that entails an annual audit. The same law had also officially declared Bitcoin a legal tender in Japan.

In the course of this, a part of the crypto exchanges operating in Japan was closed. However, those vendors who could meet the requirements imposed by the Japanese government were given official state licenses. In the long term, such a regulatory solution can have a decisive effect on the acceptance of cryptocurrencies and, despite partial restrictions, even contribute to their further growth. A well-defined set of rules that sets a framework for cryptocurrency trading is a prerequisite for mainstream adaptation. Without the necessary legal certainty and consumer protection, it will be difficult to convince broad sections of society and traditional cryptocurrency companies.


So it remains to be noted that regulated trading in cryptocurrencies is possible - it is already happening in Japan. The success there confirms the system right: Japan has become (after the prohibition of crypto exchanges in China) the world's largest market for cryptocurrency trading. Given this development, it seems only a matter of time before similar laws apply in Europe.