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Cryptocurrencies in the US: A late regulation but for a short time

  • Consequences of the lack of regulation of cryptocurrencies in the United States.
  • The need to lead investment in blockchain technology research and development.
  • Signs of change in the regulation of digital assets in the United States.

Cryptocurrencies have been the scene of conflicts in the last year, characterized by scams, crises and reductions in jobs in the sector.

However, the responsibility for these failures lies largely with the same companies that promoted these cryptocurrencies.

Despite promises of self-regulation by major industry players, harmful elements not only undermined these promises but also led the Securities and Exchange Commission (SEC) to crack down instead of taking a more aggressive approach thoughtful.

And here comes what we could call “narrative of gravity“. The media, public, and influential figures have embraced a negative narrative about cryptocurrencies without properly questioning or analyzing it.

This narrative has driven the SEC to implement strict regulations on cryptocurrencies, instead of exploring the opportunities that blockchain technology offers.

US lagging behind in cryptocurrency regulation

The result of this regulatory stance is that the United States is at a disadvantage in the global competition over cryptocurrency regulation.

The European Union, the United Kingdom, Japan, Singapore, the United Arab Emirates, and even China have established or are in the process of establishing strong regulatory frameworks for cryptocurrencies.

In contrast, the United States, a global economic power, lacks a strong federal regulatory framework.

Talent drain and development

And this is affecting the cryptocurrency industry in the United States. Proof of this is reflected in a recent report by Electric Capital, pointing out that the country has lost an important part of its open source blockchain developers in recent years. In 2018, the United States was home to 42% of these developers, but by 2022, that number has dropped to 29%. Almost half of the developers!

Global economic interdependence

The lack of regulation in the United States also clashes with the global economic interdependence that prevails in other major economies.

To maintain its role as an engine of the global economy, the United States should follow the global trend in cryptocurrency regulation.

Signs of change

But signs of a clear future regulatory framework are beginning to emerge. A recent bill proposes a path to regulate digital assets that are initially considered securities and later classified as commodities.

This would allow the SEC to oversee investment tokens, while the Commodity Futures Trading Commission (CFTC) would oversee those that qualify as commodities.

Related content: 5 Cryptocurrency Investment Strategies for Beginners

The way to follow

Instead of fearing cryptocurrencies, the US government should lead the investment in blockchain technology research and development.

The industry will become stronger as meaningful regulations are implemented and innovation is promoted rather than imposing harsh control measures.

The time has come for the United States to define its position in the future of cryptocurrencies and blockchain technology.

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