Bitcoin will not bypass regulations

According to the governor of the Swedish central bank, Bitcoin and other cryptocurrencies are unlikely to escape regulatory oversight as regulators are responding to the sheer popularity of the phenomenon.

While monetary policy officials expressed near universal skepticism about Bitcoin and its rivals, cryptocurrencies continued to receive enthusiastic reception.

This prompted some of the biggest names in finance to move in as Wall Street banks such as Goldman Sachs Group Inc. offer cryptocurrency-related trading services.

“When something gets big enough, consumer interests and money laundering are at stake,” Riksbank Governor Stefan Ingves said on Monday. “So there’s a good reason to believe that [regulation] becomes.”

It is unclear how to regulate a product that is to avoid being scrutinized by national authorities. But governments are already trying, China in particular is increasing pressure on cryptocurrency loyalists.

The People’s Bank of China recently told financial institutions that they were not allowed to accept cryptocurrencies for payment, following a crackdown on cryptocurrency mining. However, there are signs that traders are still active, highlighting the scale of the challenge.

In the United States, Federal Reserve officials are exploring “different ways to solve this problem,” Fed vice president Randal Quarles said in May. But federal agencies need time to think about the right regulatory approach before they can create a supervisory framework, he added.

In the European Union, the committee brought the matter to a hearing in an attempt to determine how best to create a regulatory framework for crypto assets. In September, he proposed a pilot scheme for market infrastructures interested in trading crypto assets.

The race of digital currencies

Sweden, like China, is one of the most advanced countries in its efforts to develop the digital currency of the central bank.

This is because monetary authorities are trying to prepare for the disappearance of cash as a form of payment and are trying to make sure that cryptocurrencies do not fill the void. Ingves previously estimated Sweden could have its own e-krona central bank in about five years.

Ingves said cryptocurrency regulation “is likely to come at different times in different areas.”

Sweden’s Minister of Financial Markets, Asa Lindhagen, said the government is already in the process of tightening standards for cryptocurrency exchange platforms.

But she called it “work in progress at an international level.” She also said that addressing the risk of money laundering that constitutes cryptocurrencies is a “very important issue” that will require cross-border work.

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