When it comes to the crypto market, many people believe that we are only at the beginning. However, this also applies to regulation. More and more technology giants, such as Amazon and Apple, are interested in cryptocurrencies. There are many cards through which you can make payments, and cryptocurrencies are increasingly being adopted into the ordinary world. However, most of these payments are controlled by a third party.
Cryptocurrencies as such deprive banks of business and financial institutions do not want to miss this money. Almost all however, crypto payments must also go through fiat currency, and banks are therefore not afraid of crypto payments. Rather, they suffer from other threats, such as DeFi sector, which already provides financial services, loans and savings.
How can governments threaten cryptocurrencies?
The DeFi sector offers clients more freedom and decentralization. Basically, everyone has easy access and greater financial interest. There is no need for a third party. However, governments can seriously threaten cryptocurrencies through the so-called central banks digital currencies. China is a leader in the introduction of the digital currency digital yuan which is currently being fully tested.
However, China is not the only country. Digital pairs of fiat currencies are being developed simultaneously in 81 countries. China has begun to sharply reduce and regulate cryptocurrencies. It seems to be trying to replace cryptocurrencies with its solution. This is a warning signal for the adoption of cryptocurrencies in other countries of the world.
China has the financial means to implement the digital yuan soon. It even has a plan for full implementation already during the 2022 Winter Olympics in Beijing. Compared to the ECB, which has only just launched a two-year research phase, Europe is lagging behind. Even though digital euro it will probably be implemented later, we will see it once.
The goal is absolute control over money
Every supporter of the crypto market is concerned about the centralization of the digital currency. Central Banks digital currencies however, we cannot take it as competition for current cryptocurrencies. The goal of central banks is absolute control over the movement of the entire money supply in the world. Banks will thus have absolute access to all your transactions.
Of course, on the other hand, the average user also gets many advantages. Instant payments and savings from the state await us for everyone. But it’s worth it loss of anonymity?
Ultimately, therefore, governments will increasingly regulate cryptocurrencies in order to promote their own alternative. However, cryptocurrencies do not cease to exist and no one can forbid their existence. However, governments can and probably will regulate them.