It is true that the risks presented by cryptocurrencies and blockchains outweigh the opportunities. However, prohibiting the use of cryptocurrencies and blockchains is unlikely to be successful, and so, with some optimism, I suggest that future regulation and social and technological developments may produce safe and secure products and services with broad social utility for investors. 

Following the assessment of the economic potential and risk of cryptocurrency assets and discussion of key regulatory questions that the policymakers around the world need to confront. Cryptocurrency assets can be broadly classified as cryptocurrencies, a private means of payment, and initial coin offerings ICOs, typically used to fund new activities against the promise of future utilities (utility tokens) or financial returns (securities tokens). 

Policy makers must address six major public policy questions, concerning the cryptocurrency market:

1. How great is the potential of cryptocurrency assets in advanced financial systems? 
2. What is the best way to combat illegal activity, such as money laundering and terrorism finance? 
3. How can consumer and investor protection be ensured? 
4. How to address the issue of financial stability? 
5. How can cryptocurrency assets be taxed? 
6. And how can blockchain applications be embedded into the existing legal framework? 

What Are The Advantages Of Cryptocurrency

1. Many cryptocurrency investors like the fact that cryptocurrency removes central banks from managing the money supply since over time, these banks tend to reduce the value of money via inflation.
2. Some cryptocurrencies offer their owners the opportunity to earn passive income through a process called staking. Cryptocurrency staking involves using your cryptocurrencies to help verify transactions on a blockchain protocol. Though staking has its risks, it can allow you to grow your investment without buying more.
3. Some cryptocurrencies, such as Bitcoin, are considered by many investors to be a currency of the future and are racing to buy them earlier, presumably before they become more valuable.
4. Cryptocurrency is unique in the way that blockchain, the technology behind cryptocurrencies,  processing and recording system that has a potential to be more secure than traditional payment systems.
5. Some speculators like cryptocurrencies because they’re going up in value and have no interest in the currencies’ long-term acceptance as a way to move money.

Emerging Use Cases Of Cryptocurrency 

As a generic technology, cryptocurrencies and blockchains have a nearly unlimited number of potential use cases. Most use cases are still in a proof of concept stage, but some of the most promising are: supply chain and provenance, for instance, food safety supply chain, pharmaceutical production, and distribution. It should be noted that many of these emerging use cases also have distinct and real risks associated with them, especially identity, voting, and gambling. 

Emerging Industry Self-regulation

After nearly a decade of unethical, illegal, and socially repugnant activities associated with cryptocurrencies and blockchains, nascent efforts to promote self-regulatory behaviors are on the rise. The most prominent example is Gemini’s recently-announced Virtual Commodity Association, but its actual efficacy is still unproven. 

Emerging Standardization And Professionalization 

Alongside efforts to self-regulate, the cryptocurrency and blockchain industry is moving towards greater standardization and professionalization. Legitimate industry members are highly encouraging of this shift and seek further guidance. Some examples include the standardization efforts by the International Standards Organization (ISO TC307) and the Institute of Electrical and Electronics Engineers (IEEE) Blockchain Initiative. These and other organizations are working to create industry-wide standards, technical education, ethics training, and certification. 

Policy Touchpoints And Suggestions 

There remains much work to be done to fully understand the social, political, economic, and cultural implications of the risks and opportunities for cryptocurrencies and blockchains. Encouragingly, academic research in the field is finally reaching a critical mass, and as such, quantity and quality are improving. Some immediate opportunities for policy intervention include: 

• Promotion and encouragement of industry self-regulation. Self-regulation, however, should not be left to develop in a vacuum. Instead, the cryptocurrency and blockchain industry should work with relevant government and public stakeholders when developing guidelines and best practices. Importantly, self-regulation does not necessarily mean weak regulation. 
• Allocate resources for empirical research. To date, concrete data on actual users and use cases remains nearly non-existent. While there are data on businesses and industries, who real users are and what the potential implications of widespread adoption might mean for them is still a mystery. Understanding the human element is an important prerequisite for policy intervention. 
• Provide opportunities for innovation. Unlike breakthrough technologies in the past, such as the raise of internet, orbital satellites, or artificial intelligence, the United States is not necessarily leading the development of cryptocurrencies and blockchains. Arguably, languid innovation resulted from a regulatory climate that has helped protect United States citizens, but it came at the expense of failing to lead the global market. Innovation is especially fast-paced in China, where, in some parts, next-generation banking and payments infrastructure are already in place. Other innovation leaders include Japan, Canada, Ireland, United Kingdom, Germany, Russia, and Brazil.

   

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