Cryptocurrencies – making the case for constructive regulation

Tom Robinson COO of Elliptic examines some of the challenges faced by policymakers as they attempt to deal with the rapid evolution of digital currencies and why they should be seen as a force for positive change which would benefit from the creation of best practice rulesets, minimum standards and a regulatory framework that would encourage institutional investors to use them.

Digital currencies have experienced a meteoric rise in fortune since the emergence of Bitcoin in 2009. First championed by libertarians and gold bugs, they have now become the darling of Silicon Valley and are beginning to be embraced by retailers and institutional investors. Just this month, the world’s first regulated digital currency fund was launched in Jersey, with Elliptic providing fully-insured custodial services.  As they gain traction, governments and regulators are slowly realising that digital currencies can be used to bypass the traditional financial system, including its capital controls and anti-money laundering measures.  Until now the digital currency ecosystem has blossomed at least in part due to the absence of the compliance burden shouldered by other financial services companies. Can it survive in the face of regulation, or would this revolutionary new technology in fact be better harnessed through appropriate controls and a union with traditional...continued

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