Cryptocurrencies seem to be the talk of the town these days. But the global expansion of virtual currencies is facing some challenges, as China and South Korea have both banned initial coin offerings (ICOs), according to a report by The Verge.
With countries backing away from ICOs without further regulation, the use of bitcoin and other cryptocurrencies seems to have an uphill battle as a commonplace currency in the market. Will more countries follow suit and ban initial coin offerings?
As Asian regulators become more bearish on cryptocurrencies, the cyrpto bubble in Western markets (especially Silicon Valley) will become stretched ever more tightly. Just before the first major cryptocurrencies experience a flight to better-founded securities investments (bitcoin will probably be the first), the SEC will muster conviction to regulate, and the bubble will burst hard and fast.
- Other Countries Will Not Follow Suit
When more countries don't follow suit and begin to utilize cryptocurrency more, this will help combat these bans and show these countries what they are missing in terms of opportunities. It may take a while, but it's a battle worth fighting to ensure this type of alternative transaction system continues.
- Government Attention Offers Validation
We'll certainly see more questions about credibility and viability. But the fact that government bodies are paying attention offers validation. ICOs and cryptocurrencies are here to stay; these short-term setbacks will only propel the space forward in the long run. The evolution is unprecedented, and this is only the start of the decentralized, dis-intermediated financial market of the future.
- Nothing Has Really Changed
Since China’s ICO ban, we have even seen the markets resurge. And as a blockchain-based startup, we continue seeing growing interest. We had many investors from China with mutual investment agreements for M. Now all of these investors will plan to register funds where it is legal for them to participate. So, nothing has really been changed.
- The Bans Will Likely Be Dropped
While Chinese and South Korean regulators have banned ICOs, this is only temporary. Within one month of that event, Japan's Financial Services Agency stepped up as a leader in the region by officially endorsing 11 companies as operators of cryptocurrency exchanges with no plans to ban ICOs. China and South Korea are likely to drop their respective bans on ICOs, only after establishing their policies for regulation.
- Cryptocurrencies Are Here To Stay
ICOs are used to raise funds, and like any fundraising strategy, they can be abused. The technology itself isn’t flawed, but there’s been little time for regulations and norms to develop around ICOs, so nations are acting to protect investors and their perceived economic interests. The bans may impact the value of cryptocurrencies in the short term, but the long-term outlook is positive.
- Trust, Cost And Convenience Are Key
Some exponential technologies are unstoppable yet are still in their linear or deceptive stage. Neither regulation nor public resistance will stop this kind of progress. As long as the trust, cost and convenience factors are met, it’s here to stay.
- Cryptocurrencies May Be The Future Of The Financial Industry
With tech markets around the world continuing to invest in cryptocurrencies, it is doubtful that innovative countries such as China will allow themselves to fall behind. Thus, the banning of ICOs in select countries will not affect cryptocurrencies too much. Cryptocurrencies are being researched as a potential option for the future of the financial industry, and soon we may see countries legitimize them.
- Governments That Adapt First Will Reap The Benefits
This isn't the first time China has done this. It's banned and unbanned bitcoin so many times that I think people are starting to become immune to its policy changes. Cryptocurrencies are here to stay, and the governments that adapt first will reap the benefits later.