Regulatory uncertainty a barrier to broader bitcoin adoption

But speakers at the Bitcoin 2022 conference in Miami Beach, Fla., were optimistic that more policymakers and regulators were seeking to better understand the technology and support innovation in the region.

Enabling consumers to pay for products and services with crypto is seen by many in the industry as a path to wider acceptance of digital currencies. According to a report presented at the conference by cloud-based payment platform Checkout.com, a major reason more merchants are not offering crypto as a payment method is regulatory uncertainty. The report, based on a survey of 3,000 businesses in 10 countries, mostly online marketplaces, fintech and e-commerce, said regulatory uncertainty will remain, as the creation of a national legal framework to regulate crypto has been relatively slow and uneven. .

Mike Novogratz, chief executive of investment firm Galaxy Digital, said attitudes are beginning to change in Washington regarding moves to crack down on cryptocurrencies.

“There was a recent change in tone in the Presidential Executive Order. It was a change of tone from negative to balanced,” Mr. Novogratz said on Wednesday.

President Biden signed an executive order last month directing federal agencies to report on digital currencies and consider new regulations. While the order outlined the risks of cryptocurrencies to the economy, national security and the climate, it also noted its potential economic benefits, unlike many previous government announcements on the subject.

The price of bitcoin rose on the day the executive order was announced, indicating that the industry has generally welcomed the change in tone of the government.

Mr Novogratz, a former fund manager at Fortress Investment Group and an early bitcoin investor, said he does not see new crypto legislation coming up this year. “The way politics is set up, we’re going to be in a stalemate, but I think the chances of it really damaging things have gone down a lot,” he said.

He said the change in tone in Washington came after the crypto community rallied last year over an infrastructure bill that was intended to boost tax enforcement on crypto transactions. While the crypto industry was not able to change the law, the unified effort illustrated the growing influence of the youth industry in Washington and finance.

Mr Novogratz said he had called every senator he knew at the time. “It was a 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 block and it’s often a single-issue polling block, ‘Don’t screw with my bitcoins. Don’t screw with my bitcoins.'”

Panelists also noted the importance of regulators offering standards for custodians of crypto assets. Henson Orser, president of Komenu Holdings Ltd, the custodian of digital assets, said that a regulatory framework has not yet been established for issues such as data entry and segregation of fees.

Michael Shallow, chief executive of Fireblocks Inc., a startup that builds tools for the secure storage and transfer of bitcoin and other cryptocurrencies, said industry best practices were being deployed amid a lack of standardized regulations.

“I think that, unfortunately, most regulators … they are somewhat behind on getting to the point where they will actually build a standardization around this,” Mr. Shallow said.

This story has been published without modification to the text from a wire agency feed