Cryptocurrencies: Governments Approaching Regulation
Ever since its creation in 2009, Bitcoin has gained a lot of popularity among the public. This is because the creation of Bitcoin introduced a new concept: digital currency. Unlike traditional currency, which is printed by the government and controlled by the banks, digital currency is controlled by cryptography and open source software. Despite its recent rise in popularity, Bitcoin is still a very new concept and most government are approaching regulations in an unfair .
While cryptocurrencies were initially seen as a way to break financial borders, governments are now regulating the currency. While regulations are still in place for online/off-line exchanges, this recognition is a step in the right direction for cryptos.
Governments are trying to understand how cryptocurrencies work and how to regulate the currency. They're trying to understand if the price volatility is due to technological limitations or due to market manipulation. They're also looking into how to tax citizens who hold cryptocurrency wallets. Because of these issues, many countries have already issued tax guidelines for cryptocurrency transactions. According to South Korea's tax office, To-OPG, virtual currency transactions will be treated as regular business transactions under their tax laws.
One important thing to keep in mind when comparing conventional and digital currencies is that central banks control conventional currencies. However, no one knows if or when Willy Wonka's Chocolate Factory will produce its own golden ticket out of thin air. In fact, central banks around the world are looking into creating their own cryptocurrencies. While it's too soon to tell how effective these experiments will be, it's exciting to think about what new ideas they could bring about in finance transparency and global trade.
As a new and exciting industry, cryptocurrencies are still in its infancy. While their popularity is skyrocketing, there are still many unknown factors surrounding them. Since most governments are prone to regulate cryptocurrencies, citizens should consider whether or not to invest their money into these new platforms. When investing your money into anything new, make sure you read up on it first so you know whether or not it's safe before sinking your hard-earned cash into it!
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