Bitcoin’s adoption and usage keep increasing exponentially, creating fears in the mind of many government officials who believe it could affect their country’s financial stability. Many government policymakers are uncomfortable with the crypto world’s growth due to its adverse effects on its economic and financial stability. Exercising their fears, many lawmakers have called on many digital exchange platforms to regulate the use of the world’s largest cryptocurrency among its users as a way of reducing the possible effects on fiat currency.
Australian policymaker shares a different opinion about Bitcoin’s influence on financial stability
Australia’s financial regulators didn’t share the same view with other financial regulators globally, insisting Bitcoin won’t negatively affect financial stability. According to the Australian Financial Review, the Reserve Bank of Australia is confident that Bitcoin’s newfound fame won’t stop its financial growth. The financial institution believes proposed Bitcoin’s financial stability effects might be a mere expression of government officials’ fear.
While speaking at the House of Representatives Standing Committee on Economics, Michelle Bullock said that the unrest surrounding the use of Bitcoin is unwarranted. The agency’s assistant governor for financial systems believes Bitcoin’stop government officials in other countries highly exaggerate Bitcoin’s impact on financial stability.
She claimed the digital asset is far from reaching its full potential as a payment method, thereby lacking what it takes to call “money.” She also believes the asset can’t unsettle the global financial sector anytime soon because it hasn’t attained all attributes required to be adopted by every country of the world.
Why Bitcoin regulation is needed as soon as possible
Michelle equally reaffirmed that Bitcoin’s fast-paced growth doesn’t threaten the Australian financial stability due to the asset’s high volatility rate. She pointed out that the regulators’ agitation mostly surrounds stablecoin, no thanks to some of its recently launched projects, including Libra (now known as Facebook Diem).
Having discovered private stablecoins’ ability to function as money, most regulators are unpleasant with the global use of Bitcoin and other cryptocurrencies. The call for Bitcoin regulation isn’t expected to end soon unless top crypto Investors and exchange firms develop a perfect plan that pleases the unsettled regulators.
Apart from halting the proposed Bitcoin’s adverse effects on financial stability, there is an urgent need to regulate Bitcoin usage because online theft capitalizes on the improved crypto market to carry out their criminal acts. Lawmakers are keenly interested in creating laws to reduce the level at which fraudsters manipulate the asset.
In an interview granted by Christine Lagarde last month, the need for global regulations on Bitcoin cannot be overlooked by the government because it has been deployed for “funny” transactions in the past. The President of the European Central Bank (ECB) claimed that regulators must ensure that the asset’s value and activity are nearly and strictly monitored in January.
In agreement with Lagarde’s disposition, the US newly appointed Secretary Janet Yellen said that the anti-money laundering (AML) and counter-terrorist financing (CFT) added cryptocurrencies to their concerns. She opined that all concerned agencies should closely monitor the industry.