Regulation Might Make Crypto Less Cryptic

The cryptocurrency industry is notorious for its insider jargon. The language of the movement makes it difficult for newcomers to embrace the crypto-economic system. Media headlines stress unpredictability but fail to educate and empower those to see alternative outcomes.

In reality, crypto allows individuals to pioneer lasting change and greater financial abilities while increasing economic efficiencies worldwide.

The combined cryptocurrency market cap is nearly $1T, and with over 10,000 digital assets in circulation, there are opportunities for skeptics and novices alike—so long as people can understand them.

“Non-‘crypto natives’ often think this is complex technology and perhaps too difficult for your everyday man or woman to ever grasp and adopt,” says Cristiano Teixeira, co-founder of  Sandclock, a crypto company hoping to empower a broader audience to engage with the open financial ecosystem powered by the blockchain.

“However, compared to the current black box economic system that is unimaginably intricate and operates behind closed doors, ours is vastly simpler.”

Big Brands and Crypto

The insular nature of the crypto-industry can often discourage potential investors, but digital assets are at an adoptive inflection point. Mainstream application and acceptance are spreading; automaker Tesla became the industry’s first to acquire and accept Bitcoin as a form of payment (and is also the first company on the S&P 500 to do so).

Major lifestyle brands like Adidas, Nike, and Gucci are partnering with NFT projects like the Bored Ape Yacht Club to bridge the gap between digital and physical collectibles.

The Government and Crypto

In addition, efforts are being made to truly democratize these platforms built on the blockchain. Despite a bearish market, institutional adoption globally is on the rise: several Latin American countries have undertaken experiments adopting crypto, and European governments are exploring regulatory options in anticipation of its growth.

Regulatory support for digital assets would transform the ecosystem, setting the stage for robust action from hesitant or risk-averse yet curious potential investors. A regulatory framework for educating the public and developing risk-disclosure and compliance documentation for platforms would help insulate users and investors from the market’s natural volatility and cybercriminals.

“We can do economics the right way and empower many people to take control of their finances instead of being at the mercy of the Federal Reserve’s policies. But, perhaps more interestingly, we can create innovative tools with no traditional finance analogs,” Teixeira says.

Encouragingly, several major blockchain-focused bills have recently been introduced by members of both political parties in Washington DC and in state legislatures around the United States.

Regulatory support that strikes a proper balance between protecting consumers and enabling innovation would facilitate the further democratization of blockchain-based economies and make wealth creation more accessible for everyone.

More opportunities for education and expansion will be developed to support the new system, further demystifying the DeFi space and demonstrating its value to a broader audience. Modern monetary systems are intricate, globally focused, and benefit the narrowest subset of the population.

Decentralized finance offers a transparent economic system backed by the immutability of the blockchain and significantly lower barriers to access to wealth growth and management mechanisms.

Although the first digital currency, Bitcoin, was built on the pretense of operating outside the existing market, there is exponential growth and increasing interest on a global scale by traditional institutions and retail investors alike.

In ten years, the number of blockchain wallets has grown from 40 million to 70 million, with Nigeria, Vietnam, and the Philippines having the highest number of blockchain wallets. And the market is adapting to meet this genuinely globalized and decentralized audience.

For example, decentralized stablecoins, which are not issued by a central authority, can be tied to collateralized debt positions comprised of crypto assets. These coins can be quickly liquidated and can shield investors from the ebbs and flows of the market—reducing systemic risk, increasing accessibility, and making it more attractive for the average person.

Additionally, the security, transparency, and privacy advantages of using a blockchain network to record transactions offer a contrast to the frequent data breaches associated with traditional systems.

Zero-knowledge proofs, for example, protect users' identities while still allowing them to verify and process transactions on the blockchain. This is powered by the very backbone of blockchain technology that makes data entered into ledgers immutable.

With crypto on the rise, it will become harder to ignore—and everyday individuals will turn to companies that can help them enter the space in a way they can understand and effectively use to build and retain their wealth with minimal risk.