Crypto firms keen to involve regulators

[ad_1]

Amid the daily fluctuations in the prices of bitcoin and some seven thousand other cryptocurrencies, as exchanges grapple with the ins and outs of data collection and know your customers’ activities (KYC), it seems like the only certainty is that regulators watch and follow their path.

In the past few months alone, U.S. Treasury Secretary Janet Yellen has said cryptos, including stablecoins, need more regulation. The IRS wants more transparency on cryptocurrency transactions over $ 10,000. China has severely cracked down on bitcoin and its miners, and said digital offerings are banned in financial services.

Read more: Chinese crackdown leads to crypto collapse

Eden Doniger, general counsel and chief compliance officer at BitPay, told PYMNTS that this is all part of a natural evolution towards a more stable environment for cryptocurrencies and that ultimately more regulation will help in made the crypto to take root more firmly in the retail and trading parameters.

Despite the legal issues, the volumes of bitcoin, dogecoin, and other currencies are increasing. BitPay, for example, has seen bitcoin decline as a percentage of transactions, from 90% just a few years ago to just over 70%, indicating growing familiarity with other cryptos and their adoption. Indeed, PYMNTS research shows that more consumers than ever want to transact with crypto for their everyday purchases, from groceries to gasoline.

For BitPay, this is what we expected and hoped for, Doniger said of the volume increases and the move towards more regulation. She postulated that cryptos are increasingly on the radar for the general public and a number of government agencies.

In a nutshell, everyone wants to keep bad players out and help the markets continue to explode despite negative comments from politicians.

Doniger noted that blockchain payments allow more transparency in day-to-day commerce than legacy rails. We can have an amazing ecosystem that harnesses this technology at all levels and has it compliant and secure, she said.

Businesses that aren’t serious about compliance are going to have to get serious very quickly; otherwise, they will suffer the consequences, Doniger said. All stakeholders will need to ensure that they are protecting their consumers and that consumers themselves know what they are dealing with when making transactions. Average people want to get involved in crypto, but may not know how or where to start and a little education can go a long way in building confidence.

Regulatory frameworks, she said, are lagging behind demand, but as Doniger noted, the tools to build those frameworks are in place. From a compliance perspective, a crypto firm can create an anti-money laundering and terrorist financing program largely based on what any traditional financial institution would build, she said.

Related News: From Taxes to Trade, Federal Crypto Regulatory Review on the Rise

But there are some unique aspects of a crypto firm’s compliance framework that haven’t really been defined yet, anyway. But these frameworks, whether through OCC, FinCEN and other bodies and with input from crypto companies, accounting firms, and law firms, among others, can be developed collaboratively.

It may be a few more years before things really start to blend in, she said, but because consumers want to use crypto, traders want to accept it as a form of payment.

Part of the appeal to a business is that you can attract lots of new customers by adding optional cryptocurrency payments, whether someone is using bitcoin or something else, she said. Many BitPays customers make up to 5% of their sales in crypto, a percentage that is expected to flourish over the next few years.

Things have really changed in a positive direction, Doniger told PYMNTS. Having a robust regulatory framework with an innovative mindset is the perfect combination for crypto payments to become ubiquitous.

——————————

PYMNTS DATA: 100 HEALTH DIRECTORS REPORT USING AI TO FIGHT FRAUD, WASTE AND ABUSE

By the way: Healthcare companies lose 12% of their annual revenue to fraud, waste and abuse (FWA), but few are using artificial intelligence (AI) to solve these problems due to problems with costs. In AI In Focus: Targeting Fraud, Waste and Abuse In Healthcare, PYMNTS surveyed 100 healthcare executives to find out how AI could actually help businesses save money by limiting costly misrepresentation and false positives.

[ad_2]