As the cryptoactive market grows, there is increasing discussion about the need to regulate the sector, and several figures known for their work in the market are starting to champion an idea of “minimum arrangement”.
Before elaborating this idea, or the disagreement with it, it is relevant to emphasize that the fundamental aspect of the crypto economy is decentralized finance, precisely because it removes state power from its environment and takes control out of the hands of banks and financial institutions. and the government, and gives it to anyone who has access and interest.
It ensures a reduction in financial monopolies that is only possible if the judiciary does not intervene, limiting the market and subordinating all institutions and individuals to this state power.
The idea of minimum regulation can be interpreted as a misconception, just as your request for it should at least be interpreted as a lack of knowledge in this area, as it is impossible to have regulation based solely on the recognition of technology, given the exhaustively regulated Brazilian legal system.
The defense of this argument shows ignorance of the legal complexity of Brazil and completely ignores the fact that this was never the proposal of the state, but rather the provision of an extremely invasive and complicated mandatory tax declaration, taxation of any profitability and massive control over all financial institutions by the Central Bank.
A supervisory body does not provide support, conditions or legality for the development of institutions; these are already developing significantly due to revolutionary technology and market conditions. Obstacles and procedures only create barriers for those planning to enter the market and limit companies that are already active.
This defense that claims that regulation will create more confidence among investors planning to enter this sector is a distortion of reality, as the majority of investors entering the market are not looking for fictitious security provided by the state promised, but the opposite, to break away from it as much as possible..
Today we see skyrocketing adoption of this technology; the number of verified users has increased from 35 million in 2018 to more than 100 million in 2021, including people looking for high profitability, information transparency, security and technology to develop new projects and protect themselves. of inflation, among other big reasons, one of which never was because certain legislation gave her confidence in this market.
The significant growth in the number of companies and institutions that accept cryptocurrencies as a means of payment increases the interest and investments of traditional financial institutions, and not of the bureaucracy.
A practical example of how state intervention affects markets was the rise of the Internet: on the one hand, we have countries that adopted state regulation from its inception, resulting in economic impoverishment, limited access and discouraged investment.
And so it is no coincidence that it is these countries that have been highly regulated since the beginning, such as North Korea, China, Iran and Cuba, that offer the worst internet services in terms of speed, access and prices.
On the other hand, we have Romania, where this technology arrived in the early 1990s, right after the fall of communism in 1989. The country was bankrupt, so creating laws about something they didn’t even understand was not a priority.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
