Smart Regulations Are Key for the Future of Crypto

Prodigy Press Release Distribution

Blockchain assets, from Cryptocurrencies to NFTs, have seemed to be a source of great pain when it has come to regulators. Despite early innovators jumping on the decentralized system, governments and regulators have been slow on the uptake when it has come to finding a way to tame the more lawless parts of coin and token trading without clamping down on the more central established elements of the industry.

According to a recent reportfrom the Brookings Institute, the government finds itself stuck between those two exact issues. The Administration has pledged a two-pronged approach, including supporting the development of Cryptocurrencies while restricting illegal uses of the decentralized coins.

Cryptocurrencies and NFTs are part of a new wave of financial innovation that is impossible to ignore and could potentially create a wave of benefits and opportunities. Regulationsmust help legitimize the industry by working with the industry to distinguish between genuine cryptocurrencies and NFT traders and those that seek to use the newly created system to cause harm.

Regulation must walk a fine line between regulating the industry without over-regulating at the same time.

Central Bank digital currency

A Central Bank digital currency, or a CBDC, is a halfway point between a fully decentralized cryptocurrency and a regular currency issued by the U.S Central Bank. This would essentially create a new cryptocurrency, but one that is controlled by the federal reserve and centralized. The currencies would also be managed and regulated by the central banks, as opposed to blockchain-based currencies which are decentralized.

The CBDC would compete directly with established stablecoins, like Bitcoin, which would mitigate some of the issues associated with the industry. A centralized coin would, ideally, be able to offer similar benefits as regular cryptocurrencies such as fast transactions and increased innovation, while also mitigating some of the risks associated with the more roguish elements of cryptocurrencies, like short-term meme coins.

Sanctions, Arrests, and Ransom Reclamation

State and Federal law agencieshave already begun trying to police the cryptocurrency and NFT sphere by using a variety of methods including sanctions and ransom reclamation to targetthe usage of cryptocurrencies in criminal enterprises.

In 2021.Colonial Pipelines were targeted by hackers, the company paid a ransom of75 bitcoins, butthe FBI was able to recoup almost 85% of the ransom amount.The reclamation was a clear sign that the agency was taking serious measures to stop extortionists from using cryptocurrencies. Despite being a relatively new technology, Bitcoin already accounted for 98% of ransomware payments in 2019.

2021 also saw the treasury department launch sanctions against, a Russia-based crypto platform, Suex. According to the findings of the Treasury Department, the platform contained large amounts of transactions connected with criminal activity with over 40% of the transactions on the platform.

However, authorities have noted that arrests are highly unlikely as most crypto thefts are more difficul