Even though things looked rather dire for Bitcoin and other cryptocurrencies throughout the first few months of 2018, things are changing in favor of this growing industry. Silicon Valley backers are showing an increasing appetite for volatile cryptocurrencies. As such, they are demanding that the SEC not label this form of money as securities. That is a pretty interesting endeavor, albeit one that may not necessarily have a positive outcome.
SILICON VALLEY OPPOSES BITCOIN REGULATION
Ever since Bitcoin and similar currencies began gaining traction, there have been endless debates regarding regulating this industry. Every attempt made so far has either been too harsh – BitLicense, for example – or simply ineffective. Regulating something with no central authority, company, or CEO is virtually impossible. Indeed, rules have little to no long-term effect on cryptocurrencies.
Even so, there is an argument to be made in favor of Bitcoin regulation as well. With a proper legal and regulatory framework, Bitcoin would automatically gain more legitimacy. Anything that is left untouched by the government has, in the eyes of the public, no real value and should be ignored. As for Bitcoin and other cryptocurrencies, it is becoming increasingly difficult to ignore this industry any longer.
With the public’s interest in cryptocurrencies on the rise, so are the regulatory attempts. China and India have made a negative impact in this regard. The International Monetary Fund recently urged the world’s leaders to introduce a global standard which would allow for innovation first and foremost. This only further confirms that a harsh stance against Bitcoin will not work and potentially cause financial instability.
It seems Silicon Valley VCs are also in favor of a very light regulatory touch, so much so that Andreessen Horowitz and Union Square Ventures recently met with SEC officials. They argued that regulatory oversight from Washington could halt innovation in this industry altogether. That is something one needs to avoid at all costs, even though most politicians won’t necessarily see it that way.
Dissuading the SEC from labeling cryptocurrencies as securities is a seemingly impossible task. While an argument can be made for taking a more favorable approach in this regard, it remains doubtful the SEC will change its mind. That’s especially true when considering that the agency only recently intensified its oversight of the ICO industry in general. At the same time, ICO tokens and cryptocurrencies are not the same thing, and properly distinguishing between the two seems more than warranted at this stage.
It is good to see Silicon Valley VCs properly back Bitcoin and cryptocurrency. Although the final decision still rests with the regulators, engaging in an active dialogue will usually have some sort of a long-term impact. Whether that impact will be positive or negative in this case remains to be determined. Cryptocurrencies are not going away, but regulators will not give up their attempts to control this industry all that easily.
Posted from my blog with SteemPress : https://coinatory.com/2018/04/22/silicon-valley-vcs-want-the-sec-to-back-off-on-cryptocurrency-regulation/