US to license Cryptocurrency/ Digital Currency Exchanges
Following the footsteps of Japan, it seems that United States is considering for a similar plan to impose nation wide license program for all the Bitcoin and cryptocurrency exchanges. Keith Noreika, the Acting Comptroller of the Currency of the United States, said that they are considering options to have a unified regulatory framework for a transparent operation of all the cryptocurrency exchanges.
Last week, Japan too issued licenses to eleven cryptocurrency exchanges operating within it borders. Also, last month we saw the Chinese regulatory exchanges going hard on their local exchanges and ordering for an immediate shutdown of operations in China.
Such a move of licensing the exchange will be a win-win proposal for both the investor and fintech technology that could help to mitigate the risks of any fraudulent activities and will be in the larger interest of protecting the investor’s money.
Currently, the licensing of exchanges in U.S.A is done at a state level with only a few states like New York regulating the market with active programs like BitLicense. The intervention by the Office of the Comptroller of Currency will cater to a nation-wide licensing program.
However, some of the businesses have raised questions over this decision saying that involving a regulatory framework in the cryptocurrency industry could possibly increase the compliance costs. Cryptocurrency enthusiasts are not very happy with this move as they believe that one of the key advantages of using cryptocurrencies is makes transactions cheaper by bypassing banks and regulatory bodies.
Currently, there are quite a lot of mixed views and opinions pertaining to the use of cryptocurrencies as a legal ledger. Japan, who has been showing a great interest in moving ahead with cryptocurrencies, has proposed one solution. Japan’s financial service group SBI Holdings, is planning to introduce its own digital currency based on the Blockchain technology. The testing for the same is expected to start by next year.
This currency will allow the retailers to bypass the expensive on-boarding process like paying yearly lease for credit card machines and the installation costs involved. Moreover, it will also maintain a stable exchange rate with the Japanese Yen.
Keith Noreika has also highlighted the future possibility of cryptocurrency exchanges applying for bank status in U.S.A. However, he has said that such a step for authentication would undergo through severe checks and scrutiny. He stated:
“That is a long process they’d have to go through, and just because you get your foot in the door doesn’t mean you’re going to get out the door on the other side.”
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