Many cryptocurrency users wince at the sign of any regulation. They imagine crypto as a true peer-to-peer experience without any institution meddling. And truly, one of the initial philosophies that propelled cryptocurrencies is that it was “the people’s money.” And while that sounds good ideally, we can see that it doesn’t work quite as well in practice.
Where there is a lack of regulation, there is also a confluence of scammers. The crypto world is becoming more dangerous by the day as cyber criminals perfect their craft. Nowadays, investing in anything but the few leading crypto projects is a dangerous game. New products are at constant risk, meaning users need to choose between safety and the opportunity for innovation.
So most experts will agree; if crypto is to carry on, it needs a regulative framework. But they don’t quite agree on how to go about it.
In the UK, the approach is to tackle high-risk crypto assets. However, it will cover only a few select tokens, not applying to the crypto industry as a whole. The EU has a more sweeping approach, with its MICA regulation trying to validate cryptocurrencies in general.
The difference lies in the EU’s wider scope. That way, it covers cryptocurrencies as investments rather than treating them solely as payment instruments. That way, it provides a much more accurate image of how people use cryptocurrencies. Meanwhile, the UK shows reluctance in bringing full regulation to crypto.
While the change doesn’t make a huge difference for the average crypto investor, it does for service providers. The EU’s new regulation covers crypto companies, so we may see a shift in Europe-based crypto service providers.
It’s also important to note that the UK’s regulation is only the first step, with more planned in the future. So while the details are up in the air, there’s a decent chance of the UK’s final law resembling the EU’s.
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