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2022 Prediction #4: Regulated Defi On-Chain KYC

People wonder what regulations? You are right. The government kept urgently thinking about regulations and they just cannot come up with something on their minds because crypto is a very new technology that they have never been able to capture and use the existing regulations to help regulations progress. So what regulations then?

TL;DR

It will likely take years for regulators to come up with regulations. However, recently crypto rushes have made them rethink their existing positions. However, there will be the uncertainty of regulations introduced yet crypto will continue outpaced regulations.

Here is a 1 min summary of the article if you want to skip the reading.

Why Regulations

Nobody wants regulations unless the industry has made society in worse positions. That is what most people believe in. However, regulations can be a tool to erase competition and make one company a monopoly. It is a double-edged sword that can advance existing businesses while pressuring new innovations.

What Is Regulation

No one knows what regulation the government wants to put on the crypto. Current regulations are uncertain and lack of definition of cryptocurrencies. There are no official legal definitions of crypto because regulators are lack understanding of digital assets.

Check out my article 2022 Prediction #3: Zero-Knowledge Proofs or ZKPs

Year of Rug Pull

From Mark Cuban to many individual investors, 2021 was a year of rug pull. Million dollars were scammed. Mark Cuban even called for regulations on Defi which regulators now paid more attention to. Squid Game token is another scam that rug pulled people with millions of dollars.

Crypto Exchange Concerns

One of the biggest cryptocurrencies exchange in the world, Binance, was under investigation. Many countries across the globe from the US, UK to the EU and Japan have tightened up regulations. Countries like China banned crypto completely and others are working on CBDCs to counter crypto rise.

2022 Is Regulations Testing Year

It is likely regulations are uncertain and yet continue blasting in the crypto communities. Regulations will divide into pro cryptos and con cryptos. There will be more debates on the topic yet nothing may immediately resolve.

In Conclusion

Regulations may not be the end game of crypto and the communities will continue to evolve faster than regulations can catch up.

Stay tuned for the 2022 Prediction #5: Institutional Crypto Adoption


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