How Governments Should Handle Crypto and ICOs
First of all after seeing so much confusion, panic and misinformation in the news, it is about time each country made a dedicated website for cryptocurrency. The winners will be the countries who clearly communicate their policy, laws and intentions on handling cryptocurrencies.
Now in all fairness things are moving so fast, governments have genuine reason to fear cryptocurrency (aside from illegitimate reasons…) with most ICOs being absolute scams. The real reason is of course is that governments can no longer vote or control who can fund themselves, the internet and public will judge. However, there are still good reasons to have regulation or at least accountability so ICO fraudsters cannot hide overseas and disappear with the coins they collect. This is my position where I feel the majority of token ICOs have no intention of completing their projects.
Getting back to what government should do, it’s not only ICOs but also the laws surrounding the purchase, use and trade around cryptocurrency.
The first country(s) to make fair, easy and favorable laws surrounding ICOs and cryptocurrency may find itself literally walking into digital gold and could be the next Hong Kong or Singapore of the crypto-finance world. It’s up for grabs until countries clarify and cement their policies with crypto.
The first step if I were a regulator would be to hold public consultation and establish a staterun/government website domain to encourage discussion. I also imagine it will be a hard case for government going after their citizens or businesses because they could simply leave the country with their crypto. I think this is one element that business and government doesn’t like, that they can no longer control what people do with their money. Typically governments and banks work hand in hand to achieve specific goals but with cryptocurrency, much like the world-wide web (initially) they are trying to find a balance and also ways to reign in control.
This time is very different, there is a lot at stake for governments, banks, people and business. If a government moves too aggressively against the crypto world it could find itself sidelined and in financial ruin while their citizens and businesses will flock to countries that treat them better.
One of the first known examples of staterun conspiracy to harm cryptocurrency is Poland’s recent Youtube campaign: https://cryptoslate.com/polish-central-bank-caught-funding-anti-cryptocurrency-youtube-campaign/. They can’t be the only one and we know because of the well-timed press-conferences from various countries that threaten to ban ICOs or the currency outright. On that note, as an investor this gives me more confidence than ever. If crypto isn’t a big thing, then governments wouldn’t be talking about it. The fact they warn so much about crypto suggests that governments and banks are well aware it is here to stay.
It could be that some governments are just playing games and waiting to see how things play out. Perhaps internally if they see their attacks on crypto don’t kill it then they’ve already accepted that they will stop the fight against crypto. Personally I think they are well aware that they cannot stop it and are maybe buying time so they can launch their own like Japan, Russia and China have announced.
I don’t think there’s a direct comparison but this standoff reminds me of the anti-piracy fight. It used to be a fringe and underground element, but with crackdowns it actually has become more prevalent and easy for people to engage in piracy. Don’t get me wrong, crypto is not at all illegal or wrong (as compared to piracy) but the governments are essentially treating the crypto world the same way. Much like the rule of investment after your strategy fails, trying again “won’t be different this time” I believe.
What do you think, how can governments handle crypto better and how would you react to bans and other aggressive action against crypto and related businesses?