Regulatory Challenges in the Cryptocurrency Space

In this space the issue of regulation has been one major issues as they have often been changing regulations depends on the country, in some places regulations hits really hard on cryptocurrencies whilest in some places they may be fairer regulations and this all impact cryptocurrencies greatly more than we know it.

Some feel the reasons why it might be difficult to regulate cryptocurrencies unlike the traditional form of money is largely due to the fact it's decentralized so many government feels it kind of hard to totally control something as decentralized and autonomous as cryptocurrencies and because of this different issues arise due to this complexity in regulations. Regulatory challenges indeed poses a great deal of challenge in the cryptocurrencies space which I will highlight.

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Difficulty Common To Cryptocurrencies Space Due To Challenges In Regulation

Here in the cryptocurrencies space the regulation framework is kind of unclear due to the fact that it isn't really properly regulated, even in countries where cryptocurrencies is allowed for transactions we discover that there isn't really a clear cut laid down rules like something comprehensive that govern how cryptocurrencies should operate infact if they are it would be existing in a very limited country and for this reason it makes it hard for most of this project to even comply to regulations and creates a situation where there is uncertainty in the legal status cryptocurrencies. I means how can cryptocurrencies comply to regulations when there is no comprehensive regulatory rules available which is a challenge.

Also another issue faced in this regulatory issue is the fact most countries have different rules, and thus this variation in regulations as it regards to cryptocurrencies by different countries of the world makes it harder for cross border transactions to be carried out with efficiency as it such without any hitches. Since different rules applies to different countries this thus create a challenge for those wishing to participate in cross border transactions as the regulations from the sender's country on cryptocurrencies maybe lenient and then tough for the receivers own country which creates a problem which thus affects cross border transactions.

Well because of lack of proper regulation here like common in the tradtional setting where in case of fraud and other loses there are enshrined consumer right mechanism which will help protect the person since the rules or law made provision for that which means as some form this regulations will kind of intercede and help the person recover his money or the bank will have to pay for damages protecting customers in the process. This provision is not available in the cryptocurrencies space and incases of fraud the user bears the full weight of the loss and this is due to the fact there isn't any proper or well documented and clear regulation guarding or protecting the consumer which means in any event of loss the lack of regulations means there won't be anyone to be held accountable and hence no compensation will be made which is scary to most people and thus they stay off cryptocurrencies which is a challenge.

Lack of clear regulation for cryptocurrencies makes it hard for users to comply with the tax obligations in their respective country which is due to this reason the different variance in different jurisdiction as it regards to the proper tax that should be charged for cryptocurrencies transactions this makes it very difficult for individuals as well as businesses and corporation who transact with cryptocurrencies to comply to tax regulations in their respective country creating a challenge as people often look at cryptocurrencies as something used for tax aversion.

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Also when it comes to security there is also a challenge. Wallets are used for storing cryptocurrencies asset and exchange is used for trading this asset which means that users funds are always in this wallets and exchanges and there hasn't really been development of any standardized regulatory framework that properly guides this wallets and exchanges to further ensure the security of users funds and this creates a challenge and most hackers see this as an opportunity to explore their options by launching attacks in an attempt to breach an exchange or wallet and do away with users funds, hence regulation challenge is also prevalent here that's in security issues.

Conclusion

I believe it's of utmost importance that this challenges are tackled and combated as soon as possible as this will further strengthen the integrity of cryptocurrencies but then to do this it will require that the government sees cryptocurrencies in some form of positive light, they need to see and be won over by the great capability of cryptocurrencies and blockchain technogy then and only then will it be very easier to develop a clear legal and regulatory framework that will guide the operations of cryptocurrencies and ensure this regulatory challenges are tackled once and for all.