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- New regulations are expected to set in the transaction of digital currencies as per FinCEN
- The regulation proposes that in future, when a user exchanges above $3,000, then he or she has to prove his or her identity
- It is believed that the new regulations are going to pose friction in the transaction process, as proving one’s identity during every transaction would be a inconvenient process and would also lead to privacy issues
The direct usage of Bitcoin posed an inconvenience which will soon be taken over by the problem of delocalisation on and off the exchange platform. A new set of regulations were put forward by the United States Financial Crimes Enforcement Network(FinCEN). The proposal was applicable to institutions of finance that dealt with digital assets like BTC. The regulations that were proposed, primarily would be required in filing any sort of report with the FinCEN, whenever a customer purchases more than $10,000. Also, whenever an amount greater than $3,000 was made they gathered a ‘Know Your Customer’ information, when it is done from a wallet that is non-custodial in nature. The above criteria would mean that every time a customer buys Bitcoin worth $3,000 or more, he or she has to prove his or her wallet’s ownership, as well as provide a physical address along with their name and other important details.
EFFECT OF THE NEW REGULATIONS ON THE USERS
The crypto users would face a lot of problems and discomfort while making transactions, purchases, etc, with the new regulations in application. As per the old procedure, the users had to just submit a KYC document for approval and could easily buy and withdraw from the wallet. But the new regulations seem to make the procedure a lot more cumbersome for the users in future. The need of providing personal information while making a transaction would create an issue with the users privacy-and autonomy-conscious, and would thus create a headache.
BITCOINERS ARE BELIEVED TO BE WAKING UP FROM THE “CENTRALIZED EXCHANGE CLSED-LOOP”
Several underlying reasons prevail as to why a small number of people have actually involved themselves in making regular transactions using Bitcoin. Some very hardcore users might be on the verge of purchasing hardware wallet and exchange funds from that very wallet making transactions much more infrequent. However, with centralized exchanges in picture, the basic fundamentals of occasionally buying and selling for the purpose of investments will become much more smooth and user friendly. And, this stands as the reason as to why less people have accepted this venture so far. Many have even chosen to stay within a closed loop to avoid future frictions.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
