Because distributed ledger systems are still relatively new , regulators believe that they are open to vulnerabilities that may not fully reveal themselves until they are deployed on a larger scale. As such, crypto enthusiast are concerned about regulator's interference due to fears by the government that crytocurrency is the medium of choice for terrorists and criminals.
Financial Stability Oversight Council, say “regulators will need to adapt to the changing market structure” if bitcoin-like systems ultimately reduce the importance of traditional centralized intermediaries. "Since the set of market participants which makes use of a distributed ledger system may well span regulatory jurisdictions or national boundaries, a considerable degree of co-ordination among regulators may be required to effectively identify and address risks associated with distributed ledger systems,” it said.
Personally - I believe that we are going to see the end of centralized banking and cryptocurrency will take over as the new world reserve currency. As people are waking up to the fact that our current financial system is built on an unstable house of cards - it is only a matter of time before the U.S dollar becomes worthless - and ultimately the rest of the world's fiat debt based currency will meet the same fate. As the Fed continues printing more money and putting the country further into debt, while simultaneously ending out 10x more money than they actually have on the books - it is simply a matter of time now before it all comes crashing down. As they issue more currency, the existing currency is watered down and every dollar issued has less purchasing power- in a nutshell.. it means your bag of chips gets smaller and the price of it goes up.
And what will we use for money when the dollar has no value? We will look for other things to trade and so far bitcoin and other alt-coins are establishing themselves as strong contenders for alternate currency. After all - currency only has value because people agree that it does. If people agree that cryptocurrency has value and are willing to trade it then the marketplace can use it as a legitimate currency. Advocates for digital currency think it can improve the efficiency and transparency of currency systems but FSOC officials noted that bitcoin had experienced “dramatic” increases in trade delays and some transaction failures in recent months.
Though cryptocurrency is designed with fraud prevention in mind, the regulators noted that “some systems may be vulnerable to fraud executed through collusion among a significant fraction of participants in the system”.
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