By Gaurav S. Iyer, IFC Published : April 6, 2018
Ethereum News Update
Investors tend to panic when international organizations talk about cryptocurrency regulation, but is that really the nightmare scenario?
What we have at the moment seems worse.
With each country or state striking its own path on crypto regulation, investors are left without a clear sense of direction. “Where is the industry headed?” they keep wondering. All the while, a technology that was supposed to transcend borders becomes limited by them.
Just look at the difference around the world.
In the U.S., you have the head of the Securities and Exchange Commission (SEC) saying that blockchains have “incredible promise,” whereas in China and South Korea, you have a witch hunt against initial coin offerings (ICOs) and cryptocurrency trading.
This isn’t to say that the U.S. blockchain sector is completely free. The SEC is investigating dozens of ICOs, as is the Commodity Futures Trading Commission (CFTC). There’s even one sector of the Treasury working on a blacklist of cryptocurrency addresses akin to a sanctions list.
That said, U.S. authorities seem to be aiming at fraud and misuse of cryptocurrencies, rather than at the underlying innovation.
Just to provide one example, SEC Chairman Jay Clayton gave a speech recently in which he defended his agency’s fight against fraudulent ICOs. He argued that by getting rid of scams today, he was potentially saving the industry from harsher regulations tomorrow. (Source: “SEC Chief Touts Benefits of Crypto Regulation,” CoinDesk, April 5, 2018.)
Clayton also argued that ICOs are securities, not utility tokens, which makes them subject to regulation. However, he took pains to say that new terms and rules are needed for these tokens, since nothing like them has existed before.
All in all, U.S. officials have struck a conciliatory tone.
The same cannot be said for other jurisdictions. China, for one, has been anti-crypto in the extreme. Korea is almost as bad, though the country’s wide base of retail investors has resisted some attempts to rein in the sector.
But what’s my point?
Only this: An international organization—like the IMF or G20—would level the playing field of crypto regulation. It might not be ideal, but at least a compromised global standard would bring greater certainty to the marketplace.
If you’re thinking that my analysis is not Ethereum-specific, you’re right. There’s little point in writing about ETH prices specifically at the moment, because the market is bound as one.
So with prices coupled together, it occurs to me an industry-wide tailwind is needed. Global crypto regulations might do the trick, odd as it may seem, because they’d establish a clear set of rules for all jurisdictions.
2018 Ethereum Price Forecast: $1,500