The Impact of Regulation on the Growth of Cryptocurrencies

One of the good things I have actually noticed that the world of cryptocurrency has really transformed is the financial world. It has helped to create a new market system different from what we are always aware of and this has really gone a long way to give alternatives solutions as compared to the normal banking and the investment systems we are used to. Since the journey of bitcoin and directly crypto started in the year 2009, I will say it has really grown to become a huge multi trillion dollar.

But even with the rise of the cryptocurrency, I will say one of the constant battle that the crypto space have been having are the government and the regulatory bodies also. There have been a huge impact on those regulations on the development of the Crypto space and this has really become a debates for years as both. For every crypto user reading this, I will like to establish that it is really needed that you are able to see the need for the regulatory in the crypto market. As many of us will agree, the crypto space is so decentralised in nature and they work on the peer to peer market and not having central authority. Even though most of us see it as a great advantage, the truth is it is exposed to fraud, corruption and scams.

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The impact of the regulation is it does not only help to deal with the risk but also helps to protect the investors funds and making sure that the crypto market can still operate in a transparent manner. The first positive impact of regulation on the crypto growth is the fact that it increases investor confidence. What do I really mean by that? It helps to build trust in the market as for years, the crypto space has been known for its Volatility but when the regulatory structure is applied, it helps it to be safer for even retail investors to be involved in the market.

The second positive impact that regulations caused to the crypto space is the fact that it helps to foster innovation. There are actually some countries that have strict rules when it comes to crypto businesses but with the use of the Blockchain technology, the entrepreneurs can actually make use of it for their business and even have their own digital currency either attached to their business or themselves.

Then the last part of the positive impact I will like to talk about is the fact that it helps to promote the Mainstream Adoption. One of the things that I have seen that have encouraged the massive adoption of the crypto space is the fact that it has been established to be within the legal frameworks and this can make other retail investors to consider investing in it actually. Even though currently in Nigeria, the crypto space is not yet fully accepted by the government but I am so sure it is just a matter of time.

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In as much as it has so much of positive impact. I still believe there are challenges of regulation and number one is overregulation. What do I mean by that? There is a way overregulation by coming up with strict rules like the country in Nigeria can be a major challenge to the crypto space that might even discourage a lot of people from even investing if that continues. In some parts of the world right now, there have been heavy handed regulations that are bringing down and making it even harder for the crypto space to gain massive adoption.

As I conclude, there is a need to find the balance. In as much as the crypto space been regulated have so much of positive impact as I have mentioned, I still believe there still needs to be balance so that it will not come to a point that there is too much of overregulation that at the end of the day, instead of the regulation to help the crypto space to be helped, it causes more damages to it at the end of the day.