For the most part, most governments haven’t been able to fully understand how best to regulate cryptocurrencies just yet or so it seems.
Most Governments have taken a love-to-hate stance where cryptocurrencies are concerned.
This has created a paradigm where most members of the cryptospace don’t know where exactly to place the stance of many Governments on the issue.
As always, everything concerning the cryptospace is in a constant state of flux and is subject to change at any time.
In the West, there have been mixed reactions concerning the activities of the cryptospace.
The Germans, for instance, are already known to be cryptocurrency-friendly thanks to the new law that the Bundestag (Federal Parliament) has put in place that will enable banks to hold cryptocurrency assets in their custody on behalf of their clients.
This, of course, proves that Germany which is the largest economy in Europe is about to move into the cryptospace in a big way and also encourage the adoption of cryptocurrencies and their underlying Distributed Ledger Technologies.
Other Western Nations are yet to even strategically define how best to tackle cryptocurrencies as of yet. The United States Securities and Exchange Commission (SEC) is one such example.
It seems that the SEC has decided to profit from the investigation of cryptocurrency-related cases and is making a profit.
While on one hand in the short term this gives the Government the needed revenue for its coffers, it also sends a very strong negative signal to cryptocurrency companies that wish to do business in the world’s largest economy.
This will deter even those with good intentions as no one will be able to predict which side of the hammer of the SEC that they will fall on.
As such, due to the increased risk as per regulatory activities, the United States may lose its premier position as being the leader in everything technology as far as cryptocurrencies are concerned.
That is not to say however that other agencies aren’t looking at cryptocurrencies from a seemingly unbiased perspective.
The United States Commodities and Futures Trading Commission (CFTC) has already indicated this by classifying some cryptocurrencies as commodities while deferring to the SEC on others it feels do not pass its strict definitions.
Also, after such classifications, the 50 states that make up the Union have to certify each commodity.
One such state in the United States is New York who has created the notoriously hard-to-get Bitlicense which takes control of the classification of cryptocurrencies and their related activities within the state of New York.
In Asia, the Chinese seem to have done a good job so far with the passing of the blockchain law at the meeting of the last Politburo and have gone for the underlying cryptocurrency technologies separately from the cryptocurrency tokens themselves.
This also creates another paradigm where anything short of the strict definitions by the Chinese Government is afoul of the law hence their accelerated prosecutions of many cryptocurrency-related activities.
Governments will have to study how to regulate cryptocurrencies and in many nation-states create new organs, frameworks, and structures that deal specifically with cryptocurrencies and their underlying technologies.
While it may not come easy for most, a coordinated and cohesive organization of activities under the aegis of regional multinational and global bodies could make things easier as regards regulation.
The question that remains though is if bodies such as the United Nations and its various organs are ready for such a debate in a World where nationalism currently rules and Globalization is fought against.
The only way out of this problem is for nation-states to have internal and external sit-downs to define who does what why and where.
Until then, the cryptospace might as well remain in limbo.