On Regulatory Logic: There’s a United States of America between us and El Salvador

How to regulate the application of cryptocurrencies in blockchain projects should perhaps be the next challenge to be tackled in governance.

On Regulatory Logic: There's a United States of America between us and El Salvador

Anyone with a clear eye knows how risky it is to get a cryptocurrency that is completely out of your control into a legal tender. So, does it seem like Ibu Buclair is a foolish president?

El Salvador does not have its own independent sovereign currency and has previously been settled in U.S. dollars – which are issued and regulated all by the Federal Reserve. So, is this arguably the lesser of two evils!

Making Bitcoin legal tender in Salva was voted in by the Salvadoran Congress. Whether or not for the uncontrollable risks of decentralization that those of us fear, there were indeed 22 votes against it, but the Salvadoran Congress passed it with 62 votes in favor.

The bill was submitted to Congress by Nayib Bukele, the president of the Republic of El Salvador, and the proposal says, “The purpose of the law is to regulate bitcoin as an unrestricted legal tender, giving it free power and unrestricted access to any transaction, and with any public or private, natural or legal person having ownership rights.”

Obviously, most countries with their own sovereign currencies, even if also somewhat constrained by the hegemonic dollar, are less likely to be as radical as El Salvador, which does not have its own independent sovereign currency.

But it’s not a spur of the moment – El Salvador has announced it will partner with digital wallet company Strike to build the country’s modern financial infrastructure using bitcoin technology; the country will set up a trust fund to reduce the risk of investors buying bitcoin; and El Salvador has formed a bitcoin leadership team to help build a new financial ecosystem based on bitcoin ……

If El Salvador has some sort of no choice but to approach the one-bitcoin-led cryptocurrency ecosystem, we can look at the attitude of the United States, which is certainly proactive.

They let the local government of New York pilot a stable coin anchored to the US dollar very early on; they recognized the legitimacy of the decentralized cryptocurrencies of Bitcoin and Ether while imposing regulatory penalties on Ripple, etc., and cautiously but effectively promoted the Bitcoin ETF; they also let the cryptocurrency exchange Coinbase go public; the SEC chairman is even proposing a package of crypto regulation at the federal level ……

The logic behind this is an active response to the crypto-economy ecology, a respect and recognition of the mega-trend of the blockchain technology-driven crypto-economy.

Contrast this with our government governance, which is still stuck in preventing financial risks. The most positive blockchain industry essentials issued by the Ministry of Industry and Information Technology and the Central Internet Information Office do not mention a word about cryptocurrencies and the crypto economy. Even the positive and active governance, which implements focused arrests of criminal gangs that use virtual currencies to provide money transfer and money laundering services for telecommunication network fraud activities, has made the boundaries blurred and people are on edge in an atmosphere where all Chinese search engines such as Baidu and Sogou have blocked the main keywords of the three major exchanges on the PC side, Zhihu Weibo has also blocked them, and local governments are cleaning up mining practices.

Crypto is still in its early stages, with cutting-edge players working on the ZK STARK breakthrough blockchain privacy solution, the opportunities and challenges presented by the era of Ether Layer 2 blossoming, the viable practice of connecting real-world assets to DeFi, the crypto economy and the meta-universe ……

Our government has proposed to cultivate a number of well-known products in the fields of product traceability, data circulation, supply chain management, etc., cultivate 3~5 internationally competitive backbone enterprises and a number of innovation-led enterprises, and create 3~5 blockchain industry development clusters in these years, which is a positive signal and a place where domestic blockchain practitioners can expect to exert their energy. However, the underlying platform of blockchain supported by distributed computing and storage, cryptographic algorithms, consensus mechanisms, smart contracts, etc., which plays well is only the application of technology and cannot be integrated with a brand new crypto-economic ecology that the United States is actively dealing with.

Because cryptocurrencies in their early stages of development are rife with the unsettling elements of gray and black borders, it is necessary that we regulate and govern them severely. But therefore a blanket dismissal of the role of tokencryptocurrency in blockchain technology-driven business applications is debatable. How to regulate the application of cryptocurrencies in blockchain projects should perhaps be the next challenge to be tackled in governance.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/on-regulatory-logic-theres-a-united-states-of-america-between-us-and-el-salvador/
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