Is crypto salvageable? Yes. And here are two concrete examples why

With all the things that have happened in the crypto world recently, it is understandable that potential investors may be weary about getting involved. The rate and volatility of digital currencies’ recent fluctuations have stumped even seasoned investors, making everyone cautious about crypto’s long-term viability.

Is there a way to gain real trust in these currencies? While nothing is fully foolproof, experts are working on methods to detect dangers in the market and create safeguards against future catastrophes. Cryptocurrencies news is starting to move away from shock and more towards practicality. The need for proper national and international regulation, full-scale auditing, and the mandating of reserves has become clear, and certain entities started acting immediately. Let’s take a look at several things that are being done to bring crypto back into the investing world’s favor.

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“Token mapping” as a regulatory precedent 

We all know the issues that governments and multinational bodies like the EU are facing with regard to crypto regulation. Gridlock, conflicting interests, and insufficient attention given to cryptos on the part of legislators have kept this whole domain on the back burner for too long. But things are starting to change. One initiative that was recently put on the table by the Australian government is something called “token mapping.” What this attempts to do is lay out the various functions of all parts of the crypto ecosystem and see how they align with regulations. While the need for this type of holistic effort has been discussed a great deal ever since the birth of cryptocurrencies, governments have not yet taken the step of actually sitting down and putting something this comprehensive together. 

Although the idea still only exists in the form of a concept paper, there is quite a bit of enthusiasm about it among experts in the field. The Australian government notes that this is a necessary step to take, not only because of the problems that crypto has recently undergone, but also because there will be enough overlap between crypto and traditional financial markets soon that greater regulatory precision will be called for in order to keep people’s finances in order in general. 

Australia also does not currently have a system in place for the licensing and regulation of crypto service providers. As part of the paper, a framework will be established to include these providers within the existing national legislation. This will provide greater security for both the providers themselves, as well as the people who use them.

In the US, the tension between different government bodies has famously retarded the push to regulate crypto, so perhaps a smaller country’s paving the way will set an important precedent.

Hopefully, the Australians will accomplish this and set the stage for their effort to be emulated by other countries. Once more secure regulatory frameworks are established for crypto-related providers, investors will start to gain confidence in the sphere again.

Consolidation of crypto markets

Another thing that became clear following the big crash at the end of last year was that many exchanges won’t be stable enough to continue in the future. When these less stable exchanges fall off, it will become clear which ones can be relied upon.

Even Binance, one of the world’s biggest exchanges, saw such massive drops following the big collapse that it was forced to deal with the question of whether or not it had sufficient reserves to keep itself afloat in the event of an even bigger catastrophe. And while Binance hasn’t yet faced that big of a threat, the crypto world did see the collapse of over 50 exchanges last year. 

While this trend is less of a concerted action on the part of any particular player(s) in the game and more simply a natural consequence in crypto’s maturation process, it nonetheless bears stating. With the consolidation of exchanges, the crypto world is taking a step in the development process similar to one that traditional stock markets had to take earlier on in their developmental process.

The road ahead will be rocky, but not impassable

These are just two examples of ways in which the world of crypto is gradually working out the kinks in its development. Naysayers will continue to insist that these currencies are inevitably doomed to failure. But this is always the case with new technological developments that haven’t yet fully aligned themselves with the system, so it is to be expected. 

The proof will be in the pudding, of course. In 50 years we will see who is still standing and how tall, in addition to how cryptos stack up against traditional currencies. Given the multiple advantages that they provide for international usage, ease, and confidentiality, the likelihood is that several among them will come out strong in the end. 

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Hannah Fuller


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