It is time for governments to stop demonizing cryptocurrencies
El-Erian, who advises Allianz and Gramercy fund management companies, has recently commented on the subject. He calls national governments to stop the senseless rejection of digital currencies and to label them as illegal payment schemes and reckless financial speculation. It is a fact that cryptocurrencies have undergone considerable and difficult development, and El-Erian thinks that the only reason for this approach by governments is, in fact, their fear of losing control of the financial system.
The cryptocurrency market can certainly (especially compared to others) be considered young, but it already offers quality and secure solutions to the problems of traditional finances. If we use these opportunities properly, it could lead to a significant recovery of the global economy. It would certainly help cryptocurrencies and various companies operating in this sector if governments were more open to the new financial world. Currently, the situation seems to be that they are trying to slow down cryptocurrencies and create various barriers for all participants in this market.
Of course, the sceptical view of the crypto market did not arise suddenly, and in the past, the cryptocurrency industry could have been considered the "Wild West" with a number of different scams. However, the situation has changed significantly over time and government support would certainly help the whole sector. For crypto companies, in particular, good regulatory frameworks are key, which will protect people but will not unnecessarily create various barriers. In addition, governments that understand the importance of cryptocurrencies first, can gain a significant competitive advantage in this regard from the perspective of the global economy and attract a lot of investment into their jurisdiction.
Germany is taking an important step in the right direction
It is good news that some governments are gradually beginning to see the importance of cryptocurrencies and are supporting their development and adoption in their country. Important step was taken by Germany, which has currently legalized the possession of cryptocurrencies by German institutions through a new law. This could bring a large amount of new investment to the cryptocurrency market and is estimated to be as high as $ 415 million. The German government has also set a limit so that companies can hold a maximum of 20% of their assets in cryptocurrencies, which is to ensure that companies do not disappear as a result of a possible market collapse.
The new laws will make it easier for large companies to invest in cryptocurrencies, and this is, therefore, a very fundamental innovation. In addition, being one of the world's largest and most powerful economies may put pressure on other states to adopt similar rules. At the same time, Germany has one of the largest ETF markets in the crypto sector, which is certainly important, as many people will also be interested in indirect investments in cryptocurrencies.
We see pressure for wider acceptance of cryptocurrencies worldwide
In a recent interview, Zeno Staub, CEO of the Swiss group of private banking and investment management Vontobel Holding AG, spoke about the interest of their clients in cryptocurrencies. In their company, they believe in blockchain technology, which creates absolute trust without the presence of a centralized unit. They already offer their clients the opportunity to purchase cryptocurrencies in a convenient, safe and easy-to-use way. They see in the results that if clients do not have to worry about the general terms of purchase and management of these assets, they are inclined to invest part of their resources in cryptocurrencies.
A similar view was expressed in an interview with Alli McCartney, who is a private consultant at UBS and also stated that she sees interest in Bitcoin, especially among wealthy investors. These are clients who have earned their money in traditional financial markets, but understand the concept of risk-taking.Alli McCartney, Private Wealth Advisor at UBS
The global adoption of cryptocurrencies is thus well underway and it can be assumed that pressure from investors will force governments to think differently about digital assets. In addition, by creating clear regulations whose sole interest will be investor protection, they could speed up the adoption of cryptocurrencies and allow the influx of large amounts of new institutional capital.