We Need to End the “Wild West” of Cryptocurrencies

Decentralised doesn’t have to mean lawless. As Bitcoin turns 10 years old, it’s finally time to do away with the “wild west” narrative. While many believe that the cryptocurrency space is an unregulated free-for-all troubled by instability, this is changing fast.

Cryptocurrencies’ greatest strength is the fact that they are decentralised and not controlled by a central bank. However, this doesn’t need to come at the cost of security and stability. Whatever the doubters or purists say, the crypto space is being regulated.

New crypto companies (like Plutus) are applying for e-money licenses from the FCA in the United Kingdom, and there is the potential for a blanket EU measure to bring law to the supposed outlaw environment of ICO’s. This is welcome news for both the community, as well as investors. 

Unification of the two systems is the only way forward, i.e the antiquated financial system and the revolutionary technology behind the decade-old token economy. The two systems must work together to protect consumers and weed out players who don’t follow industry guidelines.

The strengthening of the system, and regulation of the crowdfunding structure (ICO), will only add more confidence that will enable a far higher volume of value transfer from other assets such as gold, property and other tradable stocks. 

The inward flow of institutional money will be beneficial for everyone involved and society in general. Individuals will be able to use blockchain and cryptocurrencies without even being aware that the technology is being used. 

Since it is impossible for any institution to ultimately regulate or control Bitcoin, people will gain confidence in businesses with a primary focus on crypto; provided that they are regulated by both the blockchain and their local financial watchdog.

It’s here, too, that cryptocurrencies show their legitimacy as a currency: they are increasingly used as a medium of exchange, a unit of measurement and a store of value for multiple use cases (in this sense, Bitcoin is often referred to as digital gold). They aren’t just tokens for speculation.

Experts increasingly predict a recession within the next two years. This is a decade after the last recession which led to the birth of Bitcoin by a person or a group called Satoshi Nakamoto, which in turn brought in the storm of the current tokenised economy. With that, there is an opportunity for crypto to show it’s true value, not as an unstable asset, but as a powerful financial tool with which to weather instability. 

Like any developing technology, it takes time for the full applications and implications to take shape. Just look at the internet in the 1990s: the dot-com bubble was a major source of instability at the time, but as companies started using the internet, this changed dramatically. Only a few years later, It is now a fundamental and inescapable part of daily life for billions of people.

Initiatives such as the Interbank Information Network (INN) are a testament to major banks’ willingness to integrate with this new technology, even in its infancy. As they start using this tech and building on the blockchain, we will see a groundswell change.

Who knows? It might even offer solutions to the Brexit debacle, for example enabling the UK customs union and tax authorities to have total transparency when tracking both imports and exports. In a no-deal scenario, we’re going to need all the help we can get.

Ultimately this “wild west” discourse is counterproductive. Britain is facing a period of instability, with constant fear mongering surrounding the Brexit. The sooner we harness these new technologies to streamline processes and weather periods of difficulty, the better the results for everyone in the future.