The arrival of cryptocurrency has been an increasingly disruptive one in the world of business, investment, finance and, increasingly, trade. But that means the world is responding with increased regulation of it.
For anyone with an XRPaynet crypto card, that might prompt some very relevant questions. If the idea of a currency that sits outside the oversight of central banks or government-backed issuers was always going to create a stir, does that mean they are out to stop it, or to set up a legal and regulatory framework to ensure crypto is safe and used for positive purposes?
A further question may be this: as new regulations arise, will this make it easier or harder, riskier or more secure to use a crypto card? And will the landscape change so frequently as to create confusion and leave no clear answers to these questions?
Tax And Unlawful Activity Issues
In seeking answers, the first thing that should be noted is there had to be some legal and regulatory response to the rise of crypto. For example, tax law has to categorise what kind of assets they are and how they are taxed. For instance, in the UK, they are treated the same way as things like bonds and shares and are subject to capital gains tax.
There have been concerns expressed in some quarters that cryptocurrency might be misused for criminal purposes, with prominent politicians like leading US senator Elizabeth Warren among those seeking to pass a bill preventing its use in money laundering.
While Ms Warren has a more negative overall view of crypto than others, it is no bad idea to bear in mind that any kind of currency or investment is at risk of criminal activity, not least credit cards, which fraudsters, hackers and opportunist pickpockets alike will always have their eyes on.
In that context, the outstanding security systems the XRPyaNet card uses should be very reassuring.
The Global State Of Regulation
Elsewhere, it may be considered that moving away from a ’wild west’ approach could be beneficial for those who want to make more use of a crypto card. For one thing, if a cryptocurrency is less likely to collapse in the manner of Luna or FTX, firms will be more willing to accept it as payment in place of a fiat currency.
Earlier this year, the World Economic Forum (WEF) published an analysis of where things stand globally in crypto regulation. It noted that after years of a mostly deregulated landscape, the collapse of some financial institutions caused by misadventures with crypto-assets has prompted many countries to take action.
Among the measures introduced by various countries are licence and registration schemes for crypto exchanges and custodians; fiat-backed stablecoin regulation; and the development of guidance and/or approval systems for work promoting or marketing cryptoassets. The latter two now apply in the UK.
The US Trails behind
At the same time, the WEF notes, attempts at establishing more regulation in the US have run into roadblocks, mentioning bills like the Financial Innovation and Technology (FIT) for the 21st Century Act and the Blockchain Regulatory Certainty Act, which have been introduced to the house but are yet to become law.
If and when these are in place, it will define whether crypto assets are securities or commodities, as well as clarification of the roles of various bodies in regulating and managing crypto, the article stated.
What XRPayNet card holders should bear in mind is that in some cases, shortcomings in regulation can be bypassed by XRPaynet. For instance, if there are still lots of crypto exchanges and custodians out there lying beyond the jurisdiction of regulatory regimes and posing risks, XRPaynet can simply avoid them by focusing on safer, reliable alternatives.
Where Next For Regulation?
However, if there has been a significant growth of regulation in recent years, this does not necessarily mean there will be a lot more in the very near future.
For example, while the UK may have more measures in place than a couple of years ago, there was no indication in its election manifesto that the newly-elected Labour government will add more, a fact noted by Coindesk.
Of course, with a five-year term just underway, the government may decide at some point down the line that some new measures are needed, but that, at this point, is a matter of conjecture.
The US situation remains uncertain. In a year of significant elections across the globe, the American presidential election result may provide some kind of steer, but, once again, it is less useful to speculate before the event than to appreciate that, as it stands, more regulation has been aimed not at stopping cryptocurrency thriving, but making it work better.
In a world where crypto functions well and is seen as less risky, having a crypto card may become increasingly mainstream.