The Current State of Regulation In Cryptocurrency Remittance Industry
The growth of the cryptocurrency remittance industry has been in spite of almost zero regulatory requirements issued by governments. The only country which has recently done this explicitly is the Philippines. This was due to the rapid development and increasing volume of transactions done via cryptocurrency forcing their hand.
Other jurisdictions are either years away, too uncertain or never going to get there. Which is good for the industry because it can continue to develop in a relatively unencumbered environment.
Ultimately, most jurisdictions will likely take the easier route and opt to add cryptocurrency remittances to their existing remittance licensing regime albeit with some caveats.
However, the emergence of uncensorable P2P cryptocurrency applications are often higher in transaction volume than regulated platforms anyway as is the case in Iran, Venezuela, Pakistan, India, and Nigeria – all of which are large remittance markets.
Central banks which are concerned about the balance of payments in such a system, do not need to worry because the local currency does not actually enter or leave the country. A neutral unit of measure like a bitcoin is all that moves money which is already in the country and effectively stays in the country.
If more companies opt to utilise cryptocurrencies for significant remittance volume, it will mean less USD flowing into central banks to prop up the buy side support for their currency. With no demand on buy side volume, this may result in depreciation of the local currency.
Often this is the result that central banking brings, so it might be in line with their broader macroeconomic objectives.
Article Source: George Harrap LinkedIn post.
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