Legalized regulation of company activity: a new stage in the development of the cryptocurrency market
In the last few years, the cryptocurrency industry has become quite popular worldwide. Since 2017, cryptocurrencies and blockchain have become popular not only among connoisseurs of new digital technologies, but also across a broad range of people and companies. In addition, various global corporations, banks, payment systems, social media, and even governments have also begun expressing interest in digital assets.
Even today, we can already see hundreds and thousands of specific examples of the integration of cryptocurrency and blockchain into the systems of American, German, Swiss banks. Visa and Mastercard payment systems are developing their own cryptocurrency payment services, creating crypto-cards. Social media: Discord, Twitter, and Reddit have announced their interest in working with cryptocurrencies.
Governments are not sitting on the sidelines either. Virtually every country in the world has, in one way or another, turned its attention to this new digital monetary technology. Some want to properly regulate cryptocurrency from a security point of view, thereby creating a favorable environment for the development of industry, namely Switzerland and the UAE. El Salvador has completely legalized Bitcoin. Meanwhile, China is trying to ban cryptocurrency and mining.
However, at the end of the day, cryptocurrency has entered our collective consciousness and is an integral part of the lives of many people. Given the digital technology and innovation of the 21st century, it is simply impossible to ignore the use and acceptance of digital assets.
Why are many cryptocurrency companies seeking to regulate their activities?
Governments are an essential element in the acceptance and dissemination of cryptocurrency. Their future scaling-up depends on these decisions and coordination by all countries regarding digital assets. Cryptocurrency and blockchain technology will be extremely difficult to use if they are “blacklisted” by 95% of all nations on the planet.
This is currently not occurring, but it must never be allowed to happen. However, in order to avoid this in the future, all participants in the cryptocurrency industry should cooperate with government establishments on mutually beneficial terms.
Cryptocurrencies contain many useful functions and technologies, but can in theory be used to finance criminal organizations, black markets, drug trafficking, and arms trafficking. In addition, the more that the cryptocurrency market becomes accepted and widespread, the more fraudsters appear, who can easily steal money from inexperienced and gullible users.
That is why all the countries of the world are concerned about the security of cryptocurrency use and the avoidance of other risks associated with digital assets within their borders — and this is absolutely fine.
In order for the cryptocurrency industry to continue to grow, all companies offering any services related to digital assets must cooperate with governments and conduct legal activities. Licenses entitle crypto companies to officially operate in the territory of a particular country, pay taxes, comply with government authorities, thereby developing the cryptocurrency industry worldwide while also ensuring the safety of their clients. However, the question arises: Is such cooperation actually beneficial to crypto corporations and governments?
Licensing minimizes risks
First and foremost, any activity being legalized minimizes the various risks and provides the necessary safeguards to the government and the crypto corporation. It is important for the government that its citizens (potential clients of the crypto company) are not being deceived, and that the company is not contributing to the development of black markets.
By the same token, it is important for a conscientious crypto-project to be confident of its future. It needs to be sure that its existence in a country will not be suddenly ended due to a change in legislation or a sweeping ban on all crypto networks.
A license provides this sort of double-sided protection guarantee. The government verifies a cryptocurrency project and licenses it to carry out a certain type of activity. After a thorough audit of the company, the government is confident of its integrity and that its citizens are protected from any fraudulent schemes.
The company then operates officially and transparently, eliminating any risks of unexpected business interruption and increasing the flow of customers.
Why does legalization lead to scaling-up and development of the market?
Once officially authorized to operate, crypto companies will have the courage to enter the new market. More companies will emerge from the shadows and legally offer more diverse services. In this way, the market for crypto services will develop not only qualitatively but quantitatively. New technologies, crypto innovations, convenient solutions will emerge, ones that had previously not existed due to the potential risks of unofficial activities.
Such development is also of great benefit to governments. The topic of cryptocurrency is now hotter than ever, and hundreds of millions of people around the world are ready to invest in promising legal projects. In this way, countries will receive more tax revenue, increasing their budgets. Governments will encourage and then earn money themselves from the legal developments of various crypto companies within their borders.
Besides that, legalization fully addresses another important issue. Many people today fear cryptocurrencies, do not trust them, see them only as deception. They lack sufficient knowledge of digital assets, and so do not dare to enter and master the cryptocurrency market.
Many people do tend to trust the decisions of governments and state bodies. If the government of a country has issued a license for the official activity of a company, then it has been verified and studied. This means that this crypto company can be trusted, just like the cryptocurrency as a whole: it is approved and supported by the state.
In this way, legal activity will significantly expand the market and give it many new clients: both ordinary citizens of different states and institutional investors, who, against the backdrop of the general frenzy and the increase of confidence in crypto markets, will begin investing significant sums into it.
Examples of companies that have started receiving crypto licenses in various countries
Today, some cryptocurrency companies have already been licensed to operate officially in several countries or are just beginning to get legalized. Major crypto companies such as the Binance Cryptocurrency Exchange, BitOasis, LCX, the Simba Storage Bitcoin Vault, TRES OTC DMCC (selling and buying cryptocurrency in the OTC market), and TRES DLT DMCC (developing a utility token) have received crypto-licenses for various activities in several jurisdictions of the globe.
Legalization of activities and obtaining of licenses is already a real trend this year and will be for many years to come. Nowadays, virtually every prominent and reputable crypto company is trying to begin to conduct official activities in a large number of countries.
Changpeng Zhao, the CEO of one of the largesеt centralized exchange, acknowledged in a recent interview that a cryptocurrency exchange must meet the requirements of regulators worldwide, which includes obtaining proper licenses from interested governments.
This proves that today many companies focus particularly on the creation of a robust and legal structure of their business.
However, Simba Storage and TRES were among the first companies to be licensed for cryptocurrency activities. From the very beginning of their development, the companies were focused on laying a solid foundation for the future implementation of their activities.
In May 2020, TRES OTC DMCC obtained its first license for OTC cryptocurrency transactions in the UAE. The United Arab Emirates later licensed TRES DLT DMCC to develop a utility token.
It is also necessary to mention Simba Storage, which deals with custodial Bitcoin storage. The company is developing its activities in some of the most secure jurisdictions on the planet: UAE, Switzerland, Liechtenstein. It has already obtained a license in the UAE and is awaiting licenses in Liechtenstein and Switzerland. Thanks to the presence of a license and partners with the necessary permits, it’s now possible to legally store Bitcoin in their vault, along with buying Bitcoin directly with a bank card through a completely legal and safe procedure.
It is becoming clear that the next step in the popularization of the crypto industry’s market will be the industry’s legalization, which will allow the market to expand at an enormous speed and on an ever-increasing scale.
By using legal companies, one can avoid unnecessary problems and risks. Protect yourself from potential scamming, work with cryptocurrency officially, pay your taxes to the government, and stimulate the development and scaling-up of the crypto industry around the globe.