According to a report featured in the Library of Congress, one of the most common actions that were identified in 130 surveyed jurisdictions was government-issued notices about the pitfalls of investing in the cryptocurrency markets. It was made clear that cryptocurrencies are prone to high volatility and that was even made worse by the fact that most of the crypto organizations were unregulated. Citizens are therefore left on their own and in case of any issue, there is no legal recourse available to them.
The report also added that various countries issued warnings that cryptocurrencies created a loophole for illegal activities such as terrorism and money laundering. Banks and other financial institutions are therefore required to conduct due diligence requirements as imposed under the law. For example, Canada and Australia have enacted laws that have brought cryptocurrency under money laundering and counter-terrorist financing laws. Countries such as Bolivia, Nepal, Pakistan, Morocco, and Vietnam have banned all cryptocurrency activities. Qatar and Bahrain have barred their citizens from engaging in any kind of crypto activity locally but they can do so outside their borders
There are some countries that regulated initial coin offerings that use crypto as a fundraising mechanism.
It does not take a genius to note the core issue and that is mistrust. No one wants to trust cryptocurrency markets because of their decentralized nature entrenched in the blockchain technology so what next?
How to Minimize The Risks in The Crypto Market
Most people assume that the risks correlated with borrowing and lending or even just doing business is based on non-settlement of the credit or defaulting. That is what the traditional market relies on but there is a new risk type and it is referred to as lack of data. Peer to peer lending in the blockchain system targets the guys at the bottom of the pyramid hence the need to minimize the risks as much as possible. Modern technologies like blockchain have resulted in innovative platforms such as Vivigle that provides parties involved with financial rating tools that they can use to minimize risks and adjust the difficulty level of micro-financing via crypto.
Vivigle is an independent crypto credit rating platform and operates almost similar to Moody's, Fitch and S&P. It is true that many are quite worried when it comes to an unregulated market but since information is power, Vivigle ensures that crypto users have all the data they need before engaging in any business. You will have access to data on a potential client’s crypto credit history if they pay on schedule and if they lend to the right category of people.
This independent crypto rating company has a complex system that includes numerous parameters that are used to give ratings that are objective and cannot be tampered with.
The world is still trying to understand crypto and meanwhile, the players are the ones who will define the crypto realm for everyone else. It is therefore important to have a structure in your crypto business so as to be attractive to the none crypto users. The world loves structure so give them what they can trust and show them that even though the Blockchain is decentralized and a hard nut to crack, there is structure and those who are transparent in their dealings have proof of the same.
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