Bitcoin’s latest surge fuels fresh demand for regulation

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March 16 2021
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With the world’s largest cryptocurrency setting a new record over the weekend, there are renewed calls to regulate the digital asset and hold it in the same standard as the rest of the financial system.

On the same weekend as US citizens received their stimulus cheques, bitcoin surpassed a new milestone, pushing past the US$60,000 barrier and briefly reaching US$61,000 ($78,000) a coin for the first time.

Stats released by Coindesk show that in just a week, the price of bitcoin has risen by 22 per cent.

According to deVere Group CEO Nigel Green, bitcoin has become more valuable than the GDP of many countries, renewing calls to regulate the asset class.

“With a growing dominance, bitcoin and other cryptocurrencies must be held to the same standards as the rest of the financial system with a robust, workable international framework,” the CEO said.

“This will help reduce any potential disruption to global financial stability, protect investors, tackle illicit activity and deliver an economic boost to countries that adopt and adhere to it.”

Mr Green notes the importance of the digital currencies to the sector, with large-scale US businesses now investing in the sector.

“Whether crypto cynics like it or not, there’s no getting away from the fact that bitcoin is becoming an increasingly important part of the global financial system,” he said.

eToro crypto asset analyst Simon Peters agrees, highlighting that the passing of the $1 trillion barrier as well as US giants including Tesla, Mastercard and BNY Mellon lending their support to the asset class is a “turning point” for the cryptocurrency.

“Bitcoins in circulation are now worth $1 trillion, with prices having rallied 890 per cent over the last year. Most major financial institutions, including investment giants and payment companies, are now backing the world’s largest cryptocurrency, and there’s ongoing soaring interest from retail investors,” he said.

Mr Green pointed to the uptick in retail investors with the move towards digital currencies set to increase over the next five years, opining now is the time for making the regulation of crypto assets a priority.

While highlighting that he is a long-time advocate of cryptocurrencies, he said that one of the best ways to address regulatory issues is via the exchanges.

“Nearly all foreign exchange transactions go through banks or currency houses, and this is what needs to happen with cryptocurrencies. When flows run through regulated exchanges, it will be much easier to tackle potential wrongdoing, such as money laundering, and make sure tax is paid,” he noted.

“For this to happen, banks will need to open accounts for exchanges, which is why they must be regulated.”

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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