Regulators and politicians are quick to put checks and balances in place on crypto, believing that they need to have some control of the sector.
The United States lawmakers are seeking to adopt a more stringent regulatory approach than the status quo. They want to eliminate the anonymity of crypto transactions and demonstrate their ignorance of crypto.
Speaking At a virtual event organised by Axios the Democratic Congressman from Illinois, Bill Foster, who is the co-chairman of the House Blockchain Caucus hinted at the fact that anti-crypto sentiments were growing in Washington.
“There is a strong sentiment in Congress that anyone participating in anonymous crypto transactions could be considered a participant in a criminal scheme.”
Foster said that the best way for crypto to please lawmakers is to eliminate, or at minimum partially remove anonymity. Foster also stated that it was possible to take participants to court to reveal their identities under certain circumstances.
He said that crypto should aim for “pseudo anonymity”, which allows regulators to monitor transactions on blockchain networks and check for fraud violations. As it is known, privacy coins like monero (XMR) can provide strong anonymity to users while bitcoin (BTC), however, is already pseudo-anonymous. The Taproot upgrade may improve BTC user privacy.
Foster’s proposal involves using a “very closely guarded key” that courts can allow police and regulators access to in suspected fraud cases to identify and reverse transactions. He suggested that ransomware attacks could increase if this is not implemented.
He suggested that trusted third parties – in this instance, the judiciary — were the only way for the government to have the control it wants over crypto.
“Is there an appropriate court to identify the participants and a trusted third party to help you reverse fraudulent or wrongdoing transactions? He said that if a large portion of their net worth is in cryptoassets they will want the security of a third party who can resolve the problem.
France’s sense of urgency was palpable when Francois Villeroy De Galhau, governor of the central Bank of France, called upon EU leaders to create a regulatory framework for cryptocurrency with post-haste.
The former BNP Chief Operating officer said that he wanted “to stress the urgency” of regulating cryptoassets. He also stated that “we don’t have much time left – just one or two more years.”
Villeroy de Galhau said that Europe could be witness to a “marginalization” of central bank money and added:
“We must act quickly in Europe to avoid losing our monetary sovereignty.”
The European Central Bank continues to praise the digital euro and call it “risk-free”.
There are pro-crypto lawmakers too who could help to shape crypto-friendly regulations. Yesterday, Cynthia Lummis, a US senator, stated that she would like cryptocurrency to be part of a diversified portfolio that can be used for retirement funds and other savings opportunities. The Senator stated that she has “I think five bitcoin” and that USD 330 was the price she paid for her first BTC purchase in 2013.
BTC trades at USD 34.727 at 09:17 UTC and is down less that 1% per day. This reduces its weekly gains to below 7%