Recent comments from the US authorities SEC and Fed Chairmen have implied a positive change of attitude towards Cryptocurrency. For a long time now, the government has been fighting Cryptocurrency and insisting on the need to regulate digital currencies. At some point, it felt like the US authorities wanted to ban digital currencies.
During a conference on Wednesday, the chairman of the Securities and Exchange Commission (SEC) stated that he still stands to protect investors. He is looking forward to a future with the Bitcoin Exchange Traded Fund.
At the same time, the chairman of the Federal Reserve (Fed), Jerome Powell, explained some remarks he had made in July concerning Cryptocurrency. He said he realized that he had misspoken immediately after making remarks that implied intentions to ban Cryptocurrency. He made it clear that there are no plans to ban Cryptocurrency. However, there is a need for regulation because stable coins are like money market funds and bank deposits.
These positive comments came when there was a lot of fear in the crypto market, considering that countries like China had banned Cryptocurrency for the second time from their market. The US does not intend to do away with cryptocurrencies. However, from the remarks of both chairman’s, they believe that the stablecoins must operate under a regulation policy from the government.
Pressure Pushing US Authorities to Accept Cryptocurrencies
Reports from Powell and Treasury Secretary Yellen paints a bright US economy. However, they seem to be taking longer to make decisions concerning cryptocurrencies. Although previous remarks from regulators are pointing towards acceptance of the growth of Cryptocurrency, they are very cautious of the approach towards the same.
Due to this, there has been pressure from the public and top names concerning the future of Cryptocurrency. Several countries have made decisions on the same and are waiting to see the approach taken by the US. The noise from influential people might force Powell and Yellen to take action soon.
What New Regulation Could Mean for Investors
The US government wants to set laws and guidelines around stablecoins to make them safe for investors and keep cybercriminals at bay. While it seems like a noble cause, how will government regulations affect the investors?
First of all, the IRS will catch up with investors who have been evading tax. Currently, crypto investors are supposed to keep records of losses and gains from stablecoins. However, it will be easier for the IRS to access crypto transactions, eliminating tax evasions with the regulations.
In addition, the regulations might affect the price of cryptocurrencies. Because of the volatility of this market, investors are encouraged only to invest a total of 5% of their portfolio. Also, it is only wise to invest an amount you are okay to lose. Some big names in the market think that the regulations will give investors more confidence, and it is a win for everyone involved.
The Future of Cryptocurrency
The value of cryptocurrencies has been increasing over the years. However, the market is still new, and no one truly knows what the future will look like. Therefore, invest only what you are okay to lose.