Portugal is one of the most attractive countries that is working with digital assets and cryptocurrencies. The Government of Portugal is liberal as far as its policy on digital assets is concerned. The economic conditions of the country also favor cryptocurrencies. However, the central bank authorities want some form of global crypto regulations to prevent money laundering.
Portugal’s Central Bank Chief’s Views on Regulations
Portugal’s Central Bank Chief Mario Centeno said that cryptocurrencies cannot be handled by a national approach. He further claimed that international cooperation is necessary to deal with cryptocurrency transactions. Crypto assets and decentralized finance (DeFi) space have many undeniable long-term risks. About the potential of digital assets he is still skeptical. Furthermore, he supports the policy of “same risk, same regulation” while dealing with cryptocurrency regulations.
Importance of Cryptocurrency Regulations
It is now a fact that cryptocurrency has generated a lot of interest among many people in the world. However, the truth is that many central bank authorities are skeptical about global cryptocurrencies. Some countries have even banned cryptocurrencies, while many favor regulations.
Selecting Cryptocurrencies
There are many thousands of cryptocurrencies. However, most are familiar with a handful of cryptocurrencies such as Dogecoin, Ether, Bitcoin, and Ripple. Most commoners have no clue of the rest. Therefore, a framework is necessary to understand all the information available on the digital assets. The information may include the potentials and risks of those cryptocurrencies.
Minimize Cyber Security Risks and Online Fraud
The most common argument in favor of regulations is that they may reduce both the chances of risks and fraud. Hacking is a major threat worldwide and it is a fact that cyberattacks have become more common. A cyber attack can easily result in losses for investors. It can also endanger their savings. By having regulations, the authorities can implement measures to help investors to safeguard their assets. Global crypto regulations may help investors to recover their losses or address their concerns.
Protecting Investors and Preventing Market Manipulation
There are many exchange trading platforms such as PayBito. It has many good services such as White Label Crypto, coin listing, privacy policy, and refund policy. However, not all trading platforms have these good features. Market manipulation is a reality even for popular cryptocurrencies. It is therefore necessary to have authorized information on digital assets and understand the technical difficulties associated with them.
Preventing Money Laundering
Unregulated systems always increase the chances of money laundering. Criminal enterprises may find it easy to finance their criminal actions. Therefore, the common argument is that global crypto regulations may help in keeping track of real identities. It can also verify the locations of both sellers and buyers.
Also Read- Cyber Attacks: Tips to Safeguard Your Crypto Assets
Bottom Line
The Central Bank Chief in Portugal has demanded a global regulatory framework for cryptocurrencies. He gave similar reasons and justifications just like other other world leaders. These developments can be deemed as positive because many governments no longer want to ban cryptocurrencies, unlike in the past. The proposed regulations may prove to be good for the masses in the long run.
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