Cryptocurrencies are digital coins that can be used for transactional purposes. As the crypto market expanded and more users were interested in blockchain features, the worldwide acceptance of cryptocurrencies and switching them for fiat money became a concern in many states. Now, before you learn how to buy Bitcoin, you need to check your country’s tax regulations and other statements on using the cryptocurrency.
Luckily, some countries understood the need for cryptocurrencies and provided a way for all people to access knowledge easily and approach digital coins with less skepticism. Although many online courses can be accessed, governments have taken responsibility for educating people and offering them real solutions to their problems.
Argentinians are among the first to make this move to attract investors and improve the fintech sector.
The approach of the Argentinian Securities Regulator
The National Securities Commission (CNV) is Argentina’s National Securities regulator and is currently involved in exploring the cryptocurrency sector by providing an innovation hub for investors. The projects aim to help private entities work with the official body to boost fintech and crypto-regulated instruments to the market.
The institution recently launched a hub where investors and regulators can exchange information about specific products to be released on the market. The president of this regulatory body was optimistic in regard to the potential outcomes of this project, saying that the country is starting to become active in the crypto sector and generate a legal framework.
The project spawned after concerns regarding cryptocurrency scams increased in Argentina since cryptocurrency adoption peaked in recent years. Governments also want to improve the protection framework for investors, so they’re risking their investments less.
What products will leverage this innovation hub?
Besides regulation purposes, the system will also have more products for users. The hub will ensure investors who put their funds into the crypto market will be protected by using regulated products provided by this body. On the other hand, people will benefit from the national tax agency as these developments won’t be able to stay hidden from the federal tax agency.
Therefore, the crypto tax would be easier to collect when regulated instruments are in place, which brings more income to the country. Until then, exchanges and platforms outside the country power crypto transactions and investments.
Why do countries need to provide insight into cryptocurrency regulation?
The following generations might already have the crypto support they need, but for now, it would be best for all people to get educated on the subject. It’s already known that many view the crypto sector with pessimism, and we can understand why. The market is highly volatile, and users are prone to losing all their money in a matter of seconds if they’re not securing their investments well. At the same time, the lack of regulation contributes to confusion as to the actual value of cryptocurrency.
People need to be educated on the subject, but leaders must also ensure the country’s economy can sustain such a significant change. The case of El Salvador is an accurate example of what happens when there are inaccuracies between the president’s vision and people’s real needs. In El Salvador, bitcoin became a legal tender for some time, but it seems people and institutions avoid using it. On the other hand, as the country’s economy collapses, the debt increases. The real consequences of this change will be apparent a few years from now, but what’s for sure is that at the moment, bitcoin is not ready to be introduced as an official form of payment.
Some experts say the lack of crypto education prevented mass adoption. However, many other factors are to be included in this movement, such as the country’s financial situation. Of course, if cryptocurrencies were promoted properly and support would have been available from the start, things would be different. Being financially free doesn’t mean not collaborating with other institutions, which was the general belief of the first investors.
What are the challenges of worldwide crypto adoption?
The first and most urgent issue with cryptocurrency is volatility. Although altcoins have been created to tame this aspect that Bitcoin has, such as Ethereum and Dogecoin, their reliability isn’t stable still. A cryptocurrency’s value can change drastically from week to week, which isn’t easy to forecast. Although some applications can help investors in this regard, you can never know what happens that affects the chain of crypto events. Before investing, people need to understand the risks they’re exposed to fully.
Another challenge that is currently being worked on is linked to taxation. Although not many investors make huge profits from crypto, these incomes need to be taxed for the market to become more reliable and stable. Taxation is one step ahead of worldwide acceptance, and countries like Italy, Germany and the US started to provide more insight into this.
Security issues are a concern for investors and governments too. Despite the blockchain being a highly secure technology, it seems like hackers have found ways to break into systems, although multiple people across the world maintain them. Investors are always advised to have an extra security layer to protect their digital assets and be wary of the exchanges they use.
Scalability is something many cryptocurrencies need help with, especially regarding blockchain features. Ethereum is one of the ecosystems that had the most trouble with scalability as the network grew too rapidly. Investors and developers were congesting the web as many were interested in trading DApps, NFTs and other digital applications, which became more challenging to control over time. But with the latest updates, Ethereum will be able to scale its activities better and offer more security.
As Argentina joins the countries that start to prioritize cryptocurrencies, we believe that mass adoption can be boosted to occur in the future. However, more is needed for the adoption to happen flawlessly, as countries need to be prepared for this considerable economic swift. Plus, cryptocurrencies need to provide more real-life value for regular people to use them, but companies can already leverage their benefits.