The recent appreciation of Bitcoin shows the potential of digital assets to gain momentum against all odds. The flagship cryptocurrency that was once considered a hot air balloon is currently valued at several thousand times higher than the US Dollar. A growth and appreciation at this scale have started to capture the attention of the central government. Recently, Treasure Secretary of the US, Janet Yellen, has issued a volatile and enticing statement about the status of Bitcoin.
On behalf of the US government, Yellen remarked that Bitcoin is an inefficient way of conducting transactions. Similar remarks have not been made about commodities like Petroleum, Gold, and Hedge Fund as they comprise and compensate for a sizeable portion of federal reserves. The emergence of cryptocurrencies addresses the need for global economies to get out of monopolist monetary loops. However, it is still a niche market within the bounds of IT professionals strictly.
What Problems Are Keeping Crypto Away from Mainstream Users?
US government is not the first to sound the alarm of regulations about cryptocurrencies. The central bank of India has already imposed a nation-wide ban on cryptocurrencies. Many countries have also charged digital assets as tools for encouraging criminal and terrorist activities like Algeria, Pakistan, Nepal, Morocco, and Vietnam, etc. Meanwhile, citizens of Bahrain and Qatar are only allowed to invest in crypto tokens outside of their borders. More nations are added to this list that has limited the ban to the banking and financial sectors under their jurisdiction like Iran, Thailand, Colombia, Bangladesh, and China.
If lack of regulations is the issue, then issuance of digital yuan by the Central Bank of China would have been met with great enthusiasm. The main concern with DeFi networks is the potential of getting hacked. Even the second largest blockchain Ethereum was hacked and robbed in 2015. Another massive issue for the average consumer is the presence of countless cryptocurrencies and blockchains. For the time being, it seems that most blockchains are in a phase of development and it would take some time to find a winning model that could be adopted by the majority of the world.
The Emergence of Regulated Projects
Although for an average user putting money into an asset that does not provide the certainty of ownership could be a big problem. The attention of crypto aficionados is converting this platform into a regulated commodity to become more acceptable for states and central governments. CoinZoom, a US-based money service business, has managed to acquire MSB licensing in 48 states of the USA and a money transmitting listing in 45 states.