Regulation ‘will not kill off cryptocurrency’ despite the warnings of three award-winning economists, according to experts.
Joseph Stiglitz, the Nobel Prize-winning former chief economist of the World Bank, was joined by Nouriel Roubini and Kenneth Rogoff in claiming that Bitcoin’s value could drop to just $100 after being “regulated into oblivion”.
However experts from trading platform Blocktrade.com and LoyalCoin stressed that regulation will in fact be vital to crypto’s growth.
The creators of the currency exchange are pioneers for full regulation, and insist that it is the only way to properly protect users and cut down on criminal activity.
“Lack of regulation has been vital to the growth of cryptocurrency and blockchain technology, but eventually it will have to outgrow its beginnings,” said Blocktrade.com CMO Lea Lipovšek (pictured below).
“Financial institutions and cryptocurrency exchanges must work together to introduce proper regulation in a way that ensures safe trading, but also preserves these attributes that have made the tech grow so quickly.
“It needs to happen quickly as it is the only to fully crack-down on criminal activity.”
Speaking to Financial News, Nobel Prize-winning economist and former chief economist of the World Bank Joseph Stiglitz claimed government regulation will have serious ramifications once crypto “becomes significant”.
“You cannot have a means of payment that is based on secrecy when you’re trying to create a transparent banking system,” he said. “If you open up a hole like bitcoin then all the nefarious activity will go through that hole, and no government can allow that.”
Economist Kenneth Rogoff added that the value of Bitcoin could plummet to as low as £100 in 10 years after people in power “move to regulate anonymous transactions”.
But Paolo Bediones (pictured below), COO of LoyalCoin and Appsolutely Inc, has backed calls for global regulation, which he says will encourage more businesses to start taking the emerging technology seriously.
His firm is the first crypto in the Philippines and it successfully held a token generation event ending in February 2018, producing nine billion coins.
“Regulation will be essential to the adoption of cryptocurrency on a global scale, but authorities shouldn’t be too strict — making sure they allow room for growth and innovation,” he said.
“Some merchants are very wary once they see word cryptocurrency. And that is understandable. It is an alien world to many businesses. But when they see others involved, they begin to appreciate the risks involved are lower than first anticipated.
“Here, proper education and regulation could prove invaluable.”
Bediones’ blockchain-powered LoyalCoin aims to create a global rewards network of retailers, where all loyalty schemes are linked to a single virtual token. Members of this 200,000-strong community can redeem these in places like 7-Eleven and GongCha in the Philippines.
He added: “We have experienced some skepticism about the potential in the blockchain and cryptocurrency — but that can soon disappear with the correct education.
“And once more traditional businesses see proper regulation taking shape, it will also encourage them to embrace the benefits of this technology.
“The key issues affecting cryptocurrency, like security and volatility, can be rectified through regulation.”
According to Luka Gubo, the chief executive of Blocktrade.com, the appetite for proper legislation among cryptocurrency exchanges is high.
“Many of the larger organisations have now decided to impose their own version of self-regulation,” he said. “They are taking matters into their own hands and vetting who can and who can’t make trades using their platforms.”