Bitcoin and other cryptocurrencies function outside sovereign control and are free from banking system interference, but the crypto community seems to prefer that the industry be regulated, according to the results of a survey conducted by the US-based law firm Foley & Lardner.
Who is in charge?
According to 84% of the respondents, initial offerings of cryptocurrencies should be regulated at state level, while 68% believe it is necessary to oversee all cryptocurrency purchases and sales. All in all, the respondents favored a self-regulation model so long as it is subject to state regulatory oversight, Foley & Lardner found.
The surveyed participants are wary of legal uncertainty as inadequate understanding of the regulatory approach towards digital assets hampers the industry development.
Kathryn Trkla of Foley's Blockchain Task Force commented:
“It’s interesting that the number of respondents who favor some degree of federal regulation is so high. The reasons likely vary, but one may be a recognition that the decentralized platforms on which cryptocurrencies are traded or transferred are not self-contained silos. When a cryptocurrency is exchanged for USD or another fiat currency, or transferred as payment for receipt of a good or service, the transaction will likely involve the use of existing, regulated financial market infrastructure.”
Patrick Daugherty, another member of Foley's Blockchain Task Force, added:
“Uncertainty about regulatory standards and duties is an obstacle to salutary product development in this field. But a recent speech by SEC Division of Corporation Finance Director William Hinman enlightened the issues and paved the way toward wholesome engagement by the SEC with lawyers for the cryptocurrency industry.”
The game is worth the candle
Despite the recent deep correction that wiped out more than 50% of the total cryptocurrency market capitalization, 74% of the respondents expect more corrections within the next five years, and 58% are willing to take a chance on cryptocurrency despite legal risks. Experts believe that the volatility of digital assets is among the most attractive factors from an investor standpoint since colossal price fluctuations offer great opportunities for hitting the jackpot.
Who's the best?
Speaking of cryptocurrencies in general, 43% of respondents said Bitcoin would achieve mass adoption as a means of payment, which is hardly surprising as it is the oldest and the most popular coin. However, 38% of those surveyed considered Ethereum to be the best option for long-term investments as opposed to 35% saying the same for Bitcoin. Ethereum advocates named its environmentally robust strategy and unlimited issuance as essential benefits.
"Bitcoin and Ethereum are the ‘safest’ crypto assets to build a business around because they are the only crypto assets that the SEC and the CFTC agree upon. That’s not to say that Bitcoin or Ethereum investment is safe – it’s not. It’s also not a prediction that these assets will outlast all of their competitors. A competitor of Bitcoin and Ethereum could arise to take their place, or the entire asset class might disappear," Daugherty said.