The backdrop

The Initial Coin Offering on blockchain platforms has painted the world red for tech startups around the world. A decentralized network that can assign tokens to users who support an idea with money is revolutionizing and rewarding.

Profit-generating Bitcoin turned out to be an ‘asset’ for early investors who gave multiple returns in 2017. Investors and cryptocurrency exchanges around the world capitalized on the opportunity to generate huge returns for themselves, leading to to the rise of multiple online exchanges. Other cryptocurrencies like Ethereum, Ripple, and other ICOs promised even better results. (Ethereum grew more than 88 times in 2017!)

While ICOs landed millions of dollars in the hands of startups in a matter of days, ruling governments initially chose to keep an eye on the fastest fintech development in history that had the potential to raise millions of dollars in a very short period of time. .

Countries around the world are reflecting to regulate cryptocurrencies

But regulators grew cautious as the technology and its underlying effects gained popularity as ICOs began considering billions of dollars worth of funds – that too in proposed plans written in whitepapers.

It was in late 2017 that governments around the world seized the opportunity to intervene. While China has banned cryptocurrencies entirely, the US SEC (Securities and Exchange Commission) highlighted the risks posed to vulnerable investors and proposed treating them as securities.

A recent warning statement from SEC Chairman Jay Clayton, published in December, warned investors that they mentioned:

“Please also recognize that these markets cross national borders and that significant transactions can occur on systems and platforms outside of the United States. Your invested funds may travel quickly abroad without your knowledge. As a result, risks can be amplified, including Market Risk Regulators, like the SEC, may not be able to effectively go after bad actors or recover funds. “

This was followed by concerns from India, in which Finance Minister Arun Jaitley said in February that India does not recognize cryptocurrencies.

A circular sent by the Central Bank of India to other banks on April 6, 2018 asked banks to sever ties with companies and exchanges involved in cryptocurrency trading or transactions.

In Britain, the FCA (Financial Conduct Authority) announced in March that it had formed a cryptocurrency task force and would be getting help from the Bank of England to regulate the cryptocurrency sector.

Different laws, tax structures in all nations.

Cryptocurrencies are primarily coins or tokens released on a crypto network and can be traded globally. While cryptocurrencies have more or less the same value around the world, countries with different laws and regulations can generate differential returns for investors who could be citizens of different countries.

Different laws for investors from different countries would make calculating returns a tiring and cumbersome exercise.

This would imply an investment of time, resources and strategies that would cause an unnecessary lengthening of the processes.

The solution

Instead of many countries framing different laws for global cryptocurrencies, there should be a uniform global regulatory authority with laws that apply across borders. Such a move would play an important role in improving legal cryptocurrency exchanges around the world.

Organizations with a global objective such as the UN (United Nations Organization), the World Trade Organization (WTO), the World Economic Forum (WEF), the International Trade Organization (ITO) have already played an important role in uniting the world on different fronts.

Cryptocurrencies were formed with the basic idea of ​​transferring funds around the world. They have a more or less similar value on all exchanges, except for negligible arbitrage.

A global regulatory authority to regulate cryptocurrencies around the world is the need of the moment and could establish global rules to regulate the newest mode of financing ideas. Right now, all countries are trying to regulate virtual currencies through legislation, the drafting of which is in process.

If economic superpowers with other countries can build consensus by introducing a regulatory authority with laws that know no national borders, then this would be one of the biggest strides towards designing a crypto-friendly world and boosting the use of one of the fintechs. more transparent. system alwaysâ € Š-â € Š the blockchain.

A universal regulation consisting of subparts related to cryptocurrency trading, returns, taxes, penalties, KYC procedures, laws related to exchanges and penalties for illegal hacking can generate the following for us advantage.

1. It can make profit calculation very easy for investors around the world as there would be no difference in net profit due to uniform tax structures.

2. Countries around the world can agree to share a certain part of the profits as taxes. Therefore, the share of countries in the taxes collected would be uniform throughout the world.

3. It could save time invested in forming numerous committees, drafting bills followed by debates in the legislative arena (such as the Parliament in India and the Senate in the United States).

4. You don’t need to go through strenuous tax laws in each and every country. Particularly those involved in multinational commerce.

5. Even companies offering tokens or ICOs would comply with such ‘international law’. Therefore, calculating after-tax income would be a piece of cake for businesses.

6. A global structure would require more companies to come up with better ideas, thus increasing job opportunities around the world.

7. The law may be assisted by an international watchdog or global currency regulator, which may have powers to blacklist an ICO offering that does not adhere to the rules.

Not all are advantages, when it comes to a law that would govern cryptocurrencies throughout the world. There are certain disadvantages also.

Bringing together the world’s financial leaders to come together and write a law can take a long time. Discussions and bringing them to consensus can be challenging

1. Countries or economies that offer tax-free structures may not accept the law that establishes a universal tax policy.

2. Global watchdog or regulatory authority interference in monitoring regulatory developments related to ICOs may not go well with some countries

3. Universal law can result in the division of the world into factions. Countries that don’t support cryptocurrencies like China may not be part of it.

4. The law can be the brainchild of economically strong nations that could design it to serve their best interests.

5. This law would be centralized with a global regulatory body unlike cryptocurrencies which are decentralized in nature.

Conclution

The world has been united for the better. Either to make a peaceful world after World War II, or to unite for better laws and trade agreements.

The International Trade Organization (ITO), the World Trade Organization, and the World Economic Forum have some of the best brains that define the global economy.

They can come together and be part of a body that would define the economic prosperity of the world. They would help write global cryptocurrency standards and can be part of the regulatory body that would be the guide and beacon for thousands of ICOs around the world to improve. This may take time initially, but it would make things easier for times to come.