Two U.S exchanges compete to embrace bitcoins forcing federal regulators into real skeptics. Prominent financial players are taking advantage to adopt the volatile crypto-currency and invite more investors in the market without regulators agreeing on what bitcoins should be.
Bitcoins evolved in the 2008 financial crisis with a significant intention of not encountering with the government and central bank. Cryptocurrencies, Bitcoins, etc. are mostly unregulated therefore banks, brokers and mainstream investors want regulation to earn out of it.
For years U.S financial regulators have been unable to agree on what bitcoins are and their risk. It has remained uncertain for the business professionals to unveil which government agencies will regulate the rapidly growing market. CFTC, Treasury Department, and Internal Revenue Service are some of the institutions involved in tracking illegal payments. CFTC also announced in 2015 that it viewed bitcoins as commodities. Exchanges and CFTC have to keep a record on the underlying market after an announcement until they are advised on financial technology issues.
Are ETFs Next?
There are numerous ways the new futures could ignite thorough oversight of the cryptocurrency. The contracts could ease exchange-traded fund tied to bitcoins even after the failure of the previous attempt. In March, the SEC agency turned down bitcoins ETF proposed by Tyler and Cameron Winklevoss arguing that essential surveillance sharing agreements proved difficult given that significant markets for bitcoins are unregulated. A vibrant bitcoins futures market could make regulator feel at ease approving bitcoins ETFs.
Regulation is beneficial to all stakeholders but regulating futures would work well if underlying market isn’t safe. A dilemma has been there ever since digital currencies evolved giving U.S regulators a headache. Many authorities are therefore at a standstill not knowing how to proceed with the current issues. The agencies do not see their roles in this as even the constitution does not recognize this.