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Cryptocurrencies May Face Stricter Regulation after being Defined as Securities

As more institutional money enters the cryptocurrency market, there is a growing debates over cryptocurrency regulation. The governments of the countries with the world’s highest trading volume hold different attitudes towards cryptocurrency.

Of late, Thailand has passed an entirely new law defining digital assets as both currencies and securities depends on their intended purpose while the financial authorities in Japan have also defined virtual currency as financial goods.

Xiao Lei, a famous financial analyst indicated that, the regulation of digital currency will be further differentiated among different countries  in the future. Cryptocurrency will be directly defined as a kind of foreign currency in those countries hold an open attitude towards digital asset; while most of the other counties will be conservative towards it.

First of all, these countries will not acknowledge cryptocurrency as a kind of financial currency. The financial authorities will define cryptocurrencies as bulk commodities or securities depends on specific conditions.

There are also countries that are about to make use of this emerging market to establish new standards and rules, they may launch a set of criteria for judgment to seize this historical opportunity.

Xiao Lei emphasized that different countries have different considerations, which determines they will come up different regulatory ideas in the long term. It will be a good news for crypto investors, if local authorities define cryptocurrency as foreign currency or commodity as they can directly exchange cryptocurrencies with fiat money or trading these digital asset through a exchange platform.

However, if cryptocurrencies are defined as securities, that will be another story. For example, although SEC says bitcoin and ether are not securities last month, but earlier this year, the Chairman of the SEC said that tokens and digital assets would be considered as securities, which means the whole operation logic will be changed. The crypto investors will face thresholds and the financial regulatory sectors will also strength the supervision on crypto exchanges which may put tremendous pressure on the new cryptocurrencies.


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