Let’s talk about cryptocurrency regulation
Do you think regulation is possible in this field?
How should it be?
Welcome to the forum 
How about we flip this? As you raised the topic, tell us if you think regulation is possible and how you think it should be done?
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Yes, it should be regulated. There are too many crypto scams and poorly-run exchanges around not to regulate. Could effectively be enforced by forcing banks to block transfers to/from crypto firms that have not bothered to go through regulation processes in the country the bank customer is based in.
Crypto purists won’t like this because it goes against their utopian idea of crypto becoming an important currency that operates independently of the traditional financial system. But that utopian ideal is never going to take off. If it was it would have happened by know.
In addition to regulation it needs better rules/processes to handle taxation. At the moment every time you spend or trade cyrpto its a taxable event, and every time you receive new crypto you need to track the value to be able to calculate cost basis at next taxable event. Tracking and declaring all this is too complex for most people, especially if juggling multiple coins in multiple wallets or platforms. There are likely many, many people using crypto who are unwittingly committing tax fraud.
What is a crypto firm, what isn’t? Banks aren’t going to commit some form of fraud to sign up under false pretense to get bank account details to block.
What do you mean? Crypto is all different, no single crypto is exactly the same as another (besides some scams).
It also assumes there’s some crypto consensus. There are people who like using crypto for payments, there are people who like using it as an asset store.
Stranger things have happened. We went from literally being something similar to a chimp, to walking on two legs, taming fire, convincing ourselves that fire was given to us by some divine being and then to using physics to take us to the moon.
In the last decade (and a half) alone, we’ve went from the most painful phones that existed in my living memory to things that are incredibly enjoyable to use
Tl;Dr, it definitely could happen. Probably more likely to happen in countries where the currency is not treated nicely by the government and has good wireless infrastructure
The Treasury is exploring a digital pound partially for the reason of needing to ensure the pound isn’t usurped by other digital currencies, btw
no they’re not. fraud requires intent. you being negligent isn’t intent
you’ll get an HMRC fine and a big slap on the wrist. also, there are HMRC approved ways of declaring taxes on crypto you’ve lost track of; I had to use them before because I forget what wallet it was from
The approved method I went for was assuming it was free and paying tax on the whole value of it sold
That’s for regulators to decide, but I’m primarily thinking of exchanges that provide people with an interface between traditional finance and crypto. Banks wouldn’t need to sign up to exchanges. A regulator could maintain a database of account numbers associated with significant exchanges which have not received regulatory approval and supply this to banks.
By utopian or purist I’m thinking of original ideas behind bitcoin, principally decentralisation, no government involvement, and self-custody. This form of crypto may be able to avoid government regulation, but in practice it’s too complicated and onerous for most people. So most people who own crypto end up going with with centralised, custodial accounts like Coinbase, and these can be regulated.
When I say never I mean over time scales that most of us are interested in (decades / our lifetime). I’m not talking about hundreds to millions of years. Obviously none of us can make reasonable predictions on that time scale.
I’m happy to stick my neck out and say the purist idea of crypto as originally conceived (decentralised, self-custody, and no government involvement or regulation) will remain niche within our lifetimes. A significant digital currency may break into mainstream which utilises one or two of these ideas, but not all three together.
Obviously a treasury backed digital currency would have government involvement and regulation.
Fair enough. Lots of people are unwittingly breaking tax law because of the complexity of crypto taxation rules.