Uncertainty about how cryptocurrency regulation will roll out in the future, particularly in the U.S., remains a significant barrier for wider adoption of digital assets such as bitcoin, said panelists Wednesday at one of the largest bitcoin conferences of the year.
But speakers at the Bitcoin 2022 conference in Miami Beach, Fla., were optimistic that more policy makers and regulators were seeking to better understand the technology and to support innovation in the sector.
Consumers being able to pay for products and services with crypto is seen by many in the industry as a path to wider acceptance of digital currencies. But one major reason more merchants aren’t offering crypto as a payment method is regulatory uncertainty, according to a report presented at the conference by cloud-based payments platform Checkout.com. The report, based on a survey of 3,000 businesses across 10 countries, mostly online marketplaces, financial technology and e-commerce, said that regulatory uncertainty would endure, as the creation of national legal frameworks for regulating crypto has been relatively slow and uneven.
Mike Novogratz, chief executive of investment firm Galaxy Digital, said the attitude in Washington regarding moves to crack down on cryptocurrency has begun to change.
“The president’s executive order really had a change in tone recently. It was a change in tone from being negative to being balanced,” Mr. Novogratz said Wednesday.
President Biden last month signed an executive order that directed federal agencies to report on digital currencies and consider new regulations. Although the order outlined the risks cryptocurrencies pose to the economy, national security and climate, it also noted its potential economic benefits, unlike many previous government pronouncements on the topic.
Bitcoin’s price surged on the day the executive order was announced, signaling that the industry generally welcomed the change in tone from the government.
Mr. Novogratz, a former Fortress Investment Group fund manager and an early investor in bitcoin, said he doesn’t see new crypto legislation coming out this year. “The way politics are set up, we’re going to be in gridlock, but I think the chance of them really damaging things has gone way down,” he said.
He said the change in tone in Washington came after the crypto community mobilized over the infrastructure bill last year, which aimed to boost tax enforcement on crypto transactions. While the crypto industry wasn’t able to change the legislation, the unified effort illustrated the young industry’s growing influence in Washington and finance.
Mr. Novogratz said that at the time he placed calls to every senator he knew. “That was the wake-up call,” he said, referring to the large number of phone calls against the provision made by cryptocurrency advocates. “They realize this is a really powerful voting bloc and it’s often a single-issue voting bloc, ‘Don’t screw with my bitcoin. Don’t screw with my bitcode.’”
Panelists also noted the importance of regulators offering standards for custodians of cryptocurrency assets. Henson Orser, president of Komainu Holdings Ltd., a custodian of digital assets, said that so far there hasn’t yet been a regulatory framework established for such issues as the entry of data and the segregation of fees.
Michael Shaulov, the chief executive of Fireblocks Inc., a startup that builds tools for the secure storage and transfer of bitcoin and other cryptocurrencies, added that industry best practices were being deployed amid a lack of standardized regulations.
“I think that, unfortunately, most of the regulators…they’re somewhat behind getting to the point where they will actually create a standardization around this,” Mr. Shaulov said.
This story has been published from a wire agency feed without modifications to the text
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