The rate of crypto adoption – especially bitcoin – won’t reduce any time soon. This is due to the continued institutional adoption and how a country announced it as a legal tender. Fidelity, an asset management company, proposed that crypto adoption will become a significant thing for nations and central banks across the globe this year.
Meanwhile, crypto regulations are now the hot debate at the global gathering. As much as there are opportunities within the crypto space, governments want to ensure that the crime conducted with crypto participation reduces and illicit acts—such as money laundering and funding terrorism—get pinned to a large extent.
One of the world most prominent asset management companies—Fidelity—predicted the impact of bitcoin adoption across nations based on the growing demand for cryptos such as Bitcoin, Ethereum and other stablecoins used to hold market volatility.
This asset management company with about $4.9 trillion of assets under its management mentioned in its Fidelity’s research report that countries will be forced to embrace bitcoin adoption due to the growing citizens’ demand. And as such, countries that hold bitcoin will be placed ahead of other countries in economic competition.
Meanwhile, some countries that do not believe in crypto or its investment theory will be compelled to hold some insurance. Last year witnessed an influx of institutional crypto adoption. This has had an enormous impact on the crypto market and made it record new all-time highs since its inception. With this, asset management companies will have substantial capital funds to help their clients obtain and manage digital assets.
Two possible scenarios are playing out in the future. Countries will either embrace crypto adoption and obtain bitcoin for economic advantage or ban it outright and miss out on the new wave of global crypto adoption. Regardless, 2022 might come with a trend of nations and central banks acquiring bitcoin. Meanwhile, digital asset management companies will play a significant role.
Amid Fidelity’s prediction over Bitcoin adoption, the Financial Action Task Force (FATF) won’t stop its campaign for crypto regulations across nations. The organization updated its guidance in October 2021 to help crypto companies and governments effectively understand how to initiate crypto regulations. This is an effort to ensure that criminals are not aided in their illicit activities and terrorism is not receiving active sponsorship via crypto transactions. As a result, crypto regulation is essential.
While there are different speculations about the negative impact of crypto regulations, crypto firms haven’t witnessed any of the predicted effects across the industry. Instead, regulations are bringing stability to the crypto industry. Crypto startups have created more opportunities, and we see new crypto products daily. Crypto firms need to start embracing crypto regulations and abide by the “Travel Rule” constituted by the FATF. As a result, individuals and digital assets management companies like Fidelity will be responsible crypto users that prevent financial crimes across nations.
This “Travel Rule” proposes that crypto firms share collected users’ data based on specific transactions. That is, crypto firms will be diligent with sharing users’ information who conducted transactions above a certain threshold.
While all of these are happening across the crypto and digital asset management space, it is significant we question why individuals or governments are still skeptical about the possibilities crypto adoption will bring to the entire world. It is obvious digital assets is not leaving. But how do nations jump on it without causing constraints for innovation in the crypto space?
Click HERE to read more about Bitcoin Stories.
Image Source: iStockPhoto
Don’t worry, we hate spam too
one weekly digest, just the important stuff.
