US Crypto Crackdown Blessing in Disguise for Other Nations?
An article in the Wall Street Journal suggests that the regulatory crackdown on cryptocurrency in the US could actually benefit the industry elsewhere. However, despite this view, the article takes a hostile tone towards cryptocurrency and warns against celebrating the industry’s move to other countries to avoid regulation. The article argues that flouting financial regulations is not a flaw in cryptocurrency, but rather a key feature. The author accuses the industry of promoting rampant speculation and reviving bank runs, while suggesting that innovation in cryptocurrency has not created any economic value. Despite this negative view, certain regions such as the European Union, the United Kingdom, Switzerland, Hong Kong, and the United Arab Emirates have embraced cryptocurrency with friendlier regulations than those in the US. The EU’s new Markets in Crypto-Assets (MiCA) law has led major exchanges such as Binance, Coinbase, and Gemini to open regulated entities in Europe, while many other companies have opened in Hong Kong and the UAE. The article also criticizes the MiCA law for its limited reach over decentralized finance (DeFi) protocols, claiming it can end up dominated by big lenders and concentrate voting power in a few hands. Finally, the article warns that cryptocurrency regulations in the EU and elsewhere will only remain friendly until the next big scandal hits investors, at which point regulators are likely to tighten rules. The author concludes by saying that all roads may ultimately lead back to the SEC despite attempts to flee regulation.