- The Bank of America has opined that anti-privacy regulations pose risks for crypto investors
- It also stated that cryptocurrencies challenge the ability of governments to levy taxes
- The report warns of the risks and potential market disruption from anti-privacy government measures
The Bank of America Securities has issued a new report addressing the crypto industry. In the report the Bank of America warned of the risks and potential market disruption that could ensue from anti-privacy government measures.
The Crypto Industry and Anti-Privacy Regulations
Carving out a regulatory framework has been one of the most discussed topics around the crypto industry in the last year. Countries have tried different approaches to regulating the emerging industry, including anti-privacy regulations.
In 2020, France took this approach to regulating its crypto space when it passed a law to strip cryptos of its privacy in transactions. Privacy coins like Monero and ZCash, have already been massively delisted by crypto exchanges in France and other countries.
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According to a recent report from Bank of America Securities, cryptocurrencies “challenge the ability of governments to levy taxes and to control capital flows more broadly.”
The uncertainty over how the U.S. governments will act to limit these use cases presents a key risk for cryptocurrency investors. The bank stated in its report;
Encrypted private wallets with digital assets that can be transferred across borders would seem to undermine the monetary sovereignty of every nation-state.
On the Flipside
- The New York Stock Exchange (NYSE) halted trading of Virginia-based Blue Ridge Bank’s stock (BRSB) after a spike in trading activity
- The halt in trading came just a day after the firm announced the launch of the Blue Ridge Bank ATMs
- After the announcement, the price of the stocks spiked, moving from under $20 and jumped to $22.61. In response, NYSE halted trade for BRSB
The Future of Cryptos
With the growing move for crypto requirements, there is an air of uncertainty in many parts of the world, including the United States.
In the worst case, the regulators could simply move in the direction of India, Iran, and Nigeria to ban all institutions and intermediaries from transacting with cryptocurrencies.
The government could move in the direction of know your customers (KYC) policies. If that is the case, there will be an increase in customer information reporting and access requirements for cryptocurrency exchanges, which the report describes as a more plausible possibility.
The Bank of America also offered its support for central bank digital currencies (CBDCs.) According to the bank CBDCs are not just a form of payments competition. The bank opined that CBDCs are also an effort to replace private digital assets with publicly-controlled ones.
