Regulation: a little, a lot, with passion? – The topic of this year 2022 was probably thearrival of the regulation in the universe of cryptocurrencies. A series of European directives that startups and cryptocurrency investors will have to comply with in the coming years. After avoiding the topic for many months, the Ethereum co-founder, Vitalik Buterin, jump into the water. Here you are his opinion on the thorny issue of cryptocurrency regulation!
Regulation, when you care
A cage ready to slow down innovation in the sector? Or a stepping stone that prepares a wave of crowd adoption? Which side the regulation Will it tip the scales? Since nothing is ever all white or all black, it is likely that we are seeing somewhere in between. Vitalik Buterin took up the topic on Twitter on October 30, in a wire detailed.
The co-founder ofEthereum first highlighted the search for institutionalization of the sector desired by many investors. The latter, in fact, very often only hope for one thing: that the massive inflows of capital professionals are pouring into the industry pump their favorite cryptocurrency. For Vitalik, this is not a good thing:
“I am also quite happy that many ETFs (Exchange Traded Funds) are lagging behind. “
ETFs are exchange-traded funds that seek to replicate the value and performance of a particular index. In this case, BTC and ETH.
For Vitalik, especially in these lean times, regulation should let the crypto ecosystem act freely, even if it complicates the task of attracting the general public for projects. In fact, according to him, a aggressive regulation who would now try to penetrate deeply into the internal mechanisms of cryptocurrencies, often still in the draft phase, is not desirable.
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A regulation ready to nip any crypto initiative in the bud?
Regulating without trying to understand, it is possible that Europe will deprive itself of the giants of tomorrow. This maxim is so obvious, all the more so with the experience of our bitter failure during the go to the Internet, which is a shame to have to repeat it so often. L’absurdity by some regulatory axes considered is highlighted by Vitalik.
Europe rules, hackers laugh
Typically, setting up a procedure KYC (Know your customer) systematic to all protocols Challenge (decentralized finance) it seems inappropriate.
“It will annoy users without reaching hackers. In fact, they interact directly with smart contracts, through code they write themselves. “
On the other hand, the positioning KYC at the exchange levelreal strongholds of liquidity, is a good idea to combat money laundering. But it has already been done on most of them.
Protection of cryptocurrency investors: Vitalik Buterin’s proposals
According to Vitalik, several smarter measures could be taken to better protect investors. Typically, limit leverage or request a transparency total audit carried out on the smart contracts of the protocols.
On the contrary, imposing a 1 euro KYC obligation transferred between anonymous wallets is ridiculous. But it is still the requirement al severance pay program (Regulation on transfers of funds). According to Vitalik, the authorities should rather validate the use by the verify of a certain level of knowledge of the environment rather than imposing arbitrary financial limits.
Furthermore, the Ethereum boss would like these regulations to be consistent with the zero knowledge proof technology. In fact, ZK Proofs offers a framework to satisfy both the regulatory policy desired by governments and the privacy of users. In short, the best of both worlds.
As mentioned Sean Parker to Mark Zuckerberg at the birth of Facebook, “We still don’t even know what it represents, how it can grow and develop”. The same goes for cryptocurrencies. Nobody dared to imagine the impact of NFTs on our world just two years ago. And at the time, DeFi was still an obscure term. Who can pretend today to guess what revolutions will be discovered next year or two years from now? It is these revolutionary ideas that germinate in the shapely heads of adventurous startups that The rulesfor incomprehension and stupidity, trampling risk with his big shoes, nipping in the bud the development of “The internet of value” in Europe.
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