Updated: Jan 15, 2019
With the growth of cryptocurrency many countries have been struggling with the creation of a law that regulates crypto. Even though bitcoin was created based on being decentralized and eliminating the third-party interference, this all becomes very difficult when it comes to co-existing with the financial regulations that every country has. I believe that for many the sudden appearance and growth of cryptocurrency has made banks, and government entities feel threatened, thus making cryptos path through the financial system and citizen adaptation much more difficult.
Unfortunately, it becomes necessary for governments to recognize cryptocurrencies as an actual type of currency but in a digital form. For many It may be hard to wrap their head around the idea of such a thing called cryptocurrency and that it is considered money with real value. Not to mention if you're not a techy person, and yes, these people do exist, and they don't necessarily have to be seniors as many alleged; I know many people under 30 that fit this profile.
Mexico has made these efforts; because of the impact that cryptocurrency is having financially. The Mexican government found it necessary to create a law named Fintech Law: The Law to Regulate Financial Technology Institutions, in force since March 2018.
Financial technology institutions?
“Financial Technology Institutions, are those platforms dedicated to offering financial services. The new law establishes regulations on the ITF and sets the conditions for the creation of novel models of finance and technology. Within these classifications are Electronic payment fund institutions, Collective financing institutions, and Institutions that operate with virtual Assets."
Within interesting statements that I found regarding this particular law; one of them is that they are proposing to consider the use of virtual assets, with prior authorization from the Bank of Mexico. Regarding the value of crypto “This law recognizes the existence of cryptocurrencies and the value that the public establishes for cryptocurrencies as a means of exchange will be taken into account.”
I don't know what this might make you think, but as soon as I read this, it made me feel very restricted. Learning that there will have to be a prior authorization from a bank in order to use crypto; this goes against the base of cryptocurrency. There is to much power given to the Mexican bank beside this authorization the bank is also the one who investigates and decides witch cryptos are authorized to be used legally within the territory and what restrictions they will have. It´s imported to keep in touch with these laws that are being made in different countries. In Chile, I recently found out they are looking into this Fintech law to legislate, and it was surprising.
A huge cyber community already recognizes crypto and many more are joining daily, but it seems that even though crypto will continue to work independently through the network without the need of third-party regulators, it still becomes a need in many cases such as crypto exchanges and crypto businesses. It´s no secret that most of the time as soon as government entities approve something and give a thumbs-up everyone immediately assumes its legitimate and trustworthy. With cryptocurrency it has been working this way, the fact that many countries are not regulating cryptocurrencies or have laws and regulations that are still being modified makes people that are not crypto adopters feel like cryptocurrencies are a dangerous thing or afraid of being linked to scams or money laundering; sure all this with the help of the media. I’m sure that if you’re into crypto, you have probably been called out at least once by someone suggesting these things.
Whether you’re supporting or against laws that’s regulate cryptocurrency the truth is that if there is a government regulation upon them it won't depend on us, and with crypto gaining more power the more its being looked at by government entities that sooner or later will do something about it. This is why people involved in digital currencies have to try and be aware of its current situation; better yet if there is a way to teach people about it or be involved it would be much better.
Hope you enjoyed it, feel free to comment!