Cryptocurrency, in tackling cryptocurrencies. Without this, effective regulation

Cryptocurrency, a global curiosity, is designed to make online transactions extremely secure using cryptography. It is generally referred to as cybercash, digital money, digital cash, digital or virtual currency, cryptocurrency. Through cryptography, information is kept hidden by generated or written codes as it converts data into a format that is unreadable for an unauthorised user. The data is transferred using codes that can’t be decoded into a readable format.Initiatives such as cryptocurrency, token sales and blockchain of all types have triggered a global experience unlike anything ever seen before. Nearly all industries, law makers, regulators and law enforcements are struggling to keep up as the technology behind these developments disrupts their products and services.International transactions with very low operational cost are now possible because of cryptocurrency. But a series of regulation related challenges is also implied because no government agency is governing this system. Only the users are responsible for its operation.The challenges faced by digital currencies that mostly bypass exchanges, regulated banks, financial firms and central clearing houses are tackled all over the world by regulators.The challenge is to investigate and identify the illegal activities carried out with payments using crypto currencies, with semi-anonymity of the blockchain. This makes it difficult to monitor transactions and identify the suspicious ones, such as drug sales. Regulators find it very difficult to trace such illegal proceeds that are carried out using cryptocurrencies and, once again, are destroyed by different legal systems around the world. Different lawmakers have their own undertakings on regulating cyber-related transactions, which makes international unity deeply challenging.Different countries have issued information and regulations on the use of crypto currencies, but these schemes do not provide definitive answers regarding how this tool should be treated and how companies interested in its use should do so.In some countries, such as China and North Korea, regulation of web-based transactions is important for national security policy. Legal mechanisms are in place to allow extensive government encroachment on the sender and recipient details of every single transaction. Other countries, like the UK and the US, approach online regulation very carefully to preserve privacy and data protection laws and to balance security concerns against constitutionally protected freedoms.It means that a global effort is been made to regulate this worldwide payment mechanism. Governments, financial intelligence units, financial regulators and law enforcement agencies must all agree to a united approach in tackling cryptocurrencies. Without this, effective regulation of bitcoin and similar currencies is unachievable.The first step could be introducing minimum regulation; such as the ones that currently exist in some global financial standards including the IOSCO principles of securities regulation and the Basel Committee’s Core Principles for Effective Banking Supervision.Countries across the world are motivated to apply these provisions, which indicates that they accept investor-friendly policies. A similar standard applied to crypto currencies would be a sensible way forward.


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