“Attempting to artificially suppress adoption of crypto will simply make it stronger and more durable going forward.”
This quote from Forbes highlights how placing restrictions on cryptocurrency is unlikely to stop people from accessing and using it. Cryptocurrency restrictions could lead to those interested in crypto still finding ways to trade — but at far higher risk.
Cryptocurrency isn’t going anywhere soon
As we move towards a cashless society, cryptocurrencies and other digital assets are gaining popularity at an astonishing rate which is unlikely to cease. Between 2018 and 2020 the global user base of cryptocurrencies increased by almost 190 percent. And, by March 2021, one cryptocurrency wallet alone had over 70 million users. These numbers show that, despite crypto’s notorious volatility, it is not going away any time soon. (In fact, did you know that the UK has 230 cryptocurrency withdrawal machines across the country?)
‘Reactance’ is a psychological term that describes the pushback people exhibit when their behavioural freedoms are threatened. It is for this reason that banning or forbidding desired goods rarely works.
Despite this, many countries, including Bolivia, Nepal and North Macedonia, have already banned Bitcoin and other cryptocurrencies. Other countries have restrictions on using cryptocurrency as a means of payment. For example, in Vietnam, it’s legal to trade or hold crypto assets but not to purchase anything with them.
So what about other nations? This year, El Salvador became the first country to approve Bitcoin as legal tender. How can there be such big differences in attitudes to cryptocurrency regulations and restrictions?
Regulations are vital for consumer protection
Of course, one of the key features of cryptocurrency is that it’s not regulated by a central authority — it’s decentralized. And because there’s no universal regulation by any particular government, each government has its own approach to imposing directives.
In order to protect consumers and reduce the threat of money laundering and other crypto-related crime, it seems that cryptocurrency does need some level of regulation. Although the crypto market is inherently volatile, the appropriate regulation could make it safer for those buying and trading. And even though blockchain transactions are incredibly secure, humans initiate the transactions and trading — fraud happens.
However, treating cryptocurrency as a centralized entity and applying restrictions or bans is an old-world solution that does not fit the current technology.
So what’s the answer?
Well, a decentralized approach to cryptocurrency storage could be a step in the right direction. As it stands, current storage solutions for crypto are untrustworthy. Third-party exchanges do not provide sufficient security. Frequent cybersecurity oversights have historically led to numerous exchange hacks around the world. Over the years, crypto holders have lost billions of dollars worth of assets.
In the UK, The FCA’s recent ban on Binance highlights the issues associated with third-party platforms. However, as crypto management moves towards a more decentralized approach, restrictive-based regulations may not be suitable or possible.
Decentralized, secure crypto storage
In order to protect the public, the government needs to promote a platform that gives the people what they want, yet provides mechanisms for consumer protection. It’s crucial to monitor digital assets for money laundering and other criminal activity, yet without a decentralized approach, this will not be a viable long-term solution
Gridlock offers an innovative storage solution that eliminates the risks of centralization associated with exchanges and provides unparalleled security. Transparency and reliability are at the heart of the platform.
We believe we have a unique opportunity to assist with regulation and ensure governments and traders handle cryptocurrency and other digital assets safely.
Cryptocurrency is the future. With the right support and handling, it has the potential to transform the economy for the better.
If you’d like to learn more about secure, decentralized cryptocurrency storage, take a look at Gridlock’s documentation pages. Or, to keep up with the latest announcements, why not join our Discord server?