The Burning Question: What if Cryptos are Classified as Securities

A lot of debate has been going on in various countries about classifying crypto tokens as securities and bringing them under regulations that are at par with instruments that are classified as securities. And now with more money from the institutions seems to be seeping into crypto markets, the debates in the regulatory corridors around the world become rifer.

The difference of opinion among countries on cryptos

Each country has its own say and view on crypto assets and this variation in thought gets converted to law, it will just make things difficult and stricter for cryptocurrency to exist.  

Well if some analyst is to be believed or even if someone studies the way things are progressing around the globe, the regulation of digital currency will be further distinguished among different countries in the future. Cryptocurrency will be directly defined as a kind of foreign currency in those countries have a positive attitude towards a digital asset. For the countries that are conservative to it, may define cryptocurrencies as bulk commodities or securities depends on specific conditions. There is also the third kind of countries that are going to ban it completely.

In the first 2 cases, it would be easier for crypto investors to exchange them for fiat or trade them. But if any regulation that treats them beyond this purview could actually make it difficult for crypto holders to hold it or even use it with ease.

Also, read: Thailand Legalizes Cryptos by Passing Two Emergency Decrees

What happens when cryptos get “defined” as securities

A lot of countries have already begun defining cryptocurrencies as something “like securities”. If one analyses these laws and reads through a future from this, it looks really very different than what cryptocurrencies are today. If all countries define cryptocurrencies are classified as securities, that will be another story.

For example, although SEC says bitcoin and ether are not securities last month, if it changes its stance someday, it will mean that the whole operation logic will be change. The crypto investors will face thresholds and the financial regulatory sectors will also strengthen the supervision on crypto exchanges which may put tremendous pressure on the new cryptocurrencies.

Of late, Thailand has approved a totally new law defining crypto tokens as both currencies and securities depend on their proposed purpose while the financial authorities in Japan have also defined virtual currency as financial goods.

Will regulations ease operations for cryptocurrencies or will it make life difficult? Do let us know your views on the same.