In the latest development from the crypto world, Dutch National Bank is planning to bring the digital token under regulations. Another report suggests Spain is keeping a close eye on the digital currency investors fueling the regulation speculations.
However, looking at the trends in the crypto trade market, the said report does not seem to have affected the digital currencies. Today, Bitcoin showed an upward movement of 1.01% and XRP gained 1.12% (at the time of writing). Generally, regulatory measures show a dip in the trade market, but that was not the case, at least here.
How Regulation would affect the cryptocurrency market and Exchanges
Once the regulations are put in place, cryptocurrency service providers would be required to obtain a license to operate. The permit would be granted to those providers who are ready to carry out KYC and report fraudulent transactions to the central bank. Apart from the involvement of service providers, the Dutch Central Bank would also monitor the trading activities independently.
The main aim of regulations is to bring everyone under the same umbrella of rules and avoid the use of digital tokens as a tool for terrorism funding and money laundering. However, there is no specified timeline for the implementation.
Last August the Dutch bank has issued a statement caring that it doesn’t consider cryptocurrencies as money in any form. However, they don’t plan to ban its use shortly.
Similarly, Spain has identified 1500 digital currency investors who would be under the scanner of the government to avoid any money laundering and fraud.
Is the Blockchain Boom Around the Corner?
It’s not just the governments who are continually figuring out ways to incorporate the crypto domain into the central scheme of things. Apart from the government, even pro-industry players are pro-actively adopting the existing measures. Almost one-third of the crypto-service providers have in-house compliance team, and half of the industry uses Know Your Client (KYC) checks regularly.
A report shared by Cambridge Centre for Alternative Finance suggests that the increasing number of self-regulatory measures by the upcoming and established crypto service providers is a sign of maturity and growth. Contrary to the conventional belief of regulations being a bad thing, the new norms are increasing the number of location-based crypto services.
Another exciting discovery in the report shows that the number of verified users have increased four folds last year and twice in the first three quarters this year. The services related to multi-coin support grew from 47% to 8% this year.
An excerpt from the report,
“the emergence of common standards on some crypto asset platforms that has resulted in a rapid increase in the supply of tokens.”
The stigma around the Regulatory bodies and regulators are thinning out. More countries are realizing the threshold of the blockchain technology and incorporating the same in their ecosystem. A technology like blockchain cannot come to mainstream unless governments, public sector, and private sector work in a cordial relationship. With the passage of time and a better understanding of the technology, the regulatory bodies would eventually adapt to the requirements as well.