Note that the issue of regulation of the cryptocurrency industry has become one of the most popular in 2021. First of all, this is because many regulators have taken the popular cryptocurrency exchanges and their operations seriously. In particular, the most notable problems last year were with Binance, which has been the target of criticism from various authorities in various countries.

As a result, the platform's management was forced to think about fixing its reputation in the eyes of regulators around the world. One way to do this was to publish the ten fundamental rights of cryptocurrency users, with a mention of the need to regulate the niche being found in the second paragraph. You can read more about these rules at this link.


Changpen Zhao, head of the Binance exchange

How should cryptocurrencies be regulated?

In a recent publication titled “How to Make the Internet Better: 10 Principles for Global Leaders Shaping the Future of the Web3”, a16z argues for a multi-stakeholder approach to regulation that embraces governments, businesses, and ordinary people. The firm’s experts argue that stabelcoins, widely used in decentralised finance, should be closely monitored in the first instance. Here’s a quote from the experts, in which they share their view of what’s happening.

The transaction volume of decentralised finance has already reached hundreds of billions of dollars. This suggests that the concept of DeFi has a path to integration into the global financial system. Stablecoins, on the other hand, are the basic building blocks of this innovation.


Accordingly, experts have no doubt that in the future the decentralised finance industry will become a full-fledged component of the global financial system. Right now it is relatively young, so the concept of financial services without centralised authorities can predictably scare people unfamiliar with the world of digital assets. Eventually, however, the situation will change significantly - and for the better for blockchain enthusiasts.


Comparing crypto market capitalisation growth, developer activity and frequency of new start-ups

The firm also recommends international cooperation on crypto standards, more transparent tax codes and “targeted” regulatory regimes that take into account the diversity of Web3 technologies. Here’s another quote on the subject from Decrypt

Treating all digital assets the same way is analogous to a single legal regime for stocks, real estate, cars, artwork, watches and precious cards.

In other words, the crypto industry cannot be approached with a single bill template for regulation. There are many different trends among digital assets, many of which differ significantly from one another. They all require a case-by-case approach - and only then will governments be able to maximise the benefits for all members of the global economy.

Some of the crypto projects that a16z has invested in

Another interesting detail is that a16z’s publication addresses “all world leaders”, not just the US government. In this way, the firm stresses the importance of international cooperation regarding the control of cryptocurrencies. Moreover, the US alone does not carry sufficient weight to influence the entire digital asset sector.


We believe that the experts' view is correct, as attempts to find a one-size-fits-all approach to regulating such a diverse niche are doomed to fail. Decentralized finance is very different from NFT tokens, and working with StableCoins is not the same as dealing with other cryptocurrencies like Bitcoin. So we can only hope that the regulators will really listen to the experts.


What do you think about it? Share your opinion in our Millionaire Crypto Chat. There we will talk about other topics related to the world of blockchain and decentralisation.