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Crypto FUD: Cryptocurrencies Will Be Regulated Harshly or Banned

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btcmanager.com 04 June 2022 04:21, UTC
  
Reading time: ~4 m

Crypto FUD stands for Fear Uncertainty and Doubt, which is spread against cryptocurrencies. It is spread as unverified rumors designed to unpopularize the assets. FUDs have been propagated against many innovations and inventions as it is a nature among men to reject and shun what they do not truly understand. 

Wikipedia explains FUD as “a propaganda tactic used in sales, marketing, public relations, politics, polling, and cults.”Currently, the crypto space is fighting for acceptance in different sectors, including politics, making FUD so prevalent. One common crypto FUDs goes that cryptos will eventually be regulated harshly or banned. Will they? 

Claim

Many critics of cryptocurrencies have scared people that regulators will clamp down the innovation soon. In 2021, JP Morgan Chase CEO Jamie Dimon, a long-time crypto skeptic, said:

“ bitcoin has no intrinsic value, and the regulators will regulate the hell out of it.” 

Dimon is not the only person who has expressed that different governments would regulate cryptocurrencies severely. The IMF has also propagated this FUD and gone steps further to intimidate the countries that adopted cryptos. In early 2022, BBC reported that the IMF had said that it would cut the funding for El Salvador since they have adopted BTC as legal tender.

This FUD is one of the greatest ones, as almost everyone who has interacted with the crypto space has come across it. It has been gaining strength over the years in connecting to the China Ban FUD. The China FUD began when it gave warnings to the most prominent crypto services providers of a possible regulatory stunt. 

Rating

Very weak

Facts Check

Crypto regulation FUD has been around ever since the crypto space began. In the early 2010s, most people waited for the governments to give directions on crypto regulation. That reason made many not join the bandwagon since they still did not understand how the innovation worked.

Around 2013, major governmental crackdowns began, and illegal usage of cryptos was unearthed. That made the FUD stronger. By 2017, countries like China had announced a full-blown war against cryptocurrencies. They began investigating and fining crypto platforms a few years later.

Throughout the way, the FUD grew stronger, and people feared that the industry would collapse if China banned the assets. It was not until 2021 that the China FUD was disapproved. China Banned crypto in September, only for the crypto market to record a new All-time High two months later.

Since then, several governments have released their regulatory stance on crypto. El Salvador and the Central Africa Republic have adopted BTC as legal tender. The US, UAE, Russia, and India have revealed that they are not banning cryptos. A few weeks ago, 44 countries met in El Salvador to discuss Bitcoin and crypto adoption. However, a few countries have already banned crypto along the way.

The Truth About the Claim

The claim that cryptocurrency will be regulated cruelly or lead to too many bans is almost off the table now. It was strongest in 2017-2020 when significant regulatory steps and stances were not revealed. Now, regulatory steps have been taken, and the crypto market has reacted in better ways than most skeptics would have expected.

Two countries have adopted Bitcoin as their legal tender, while others have allowed some cryptos to be traded. Countries like UAE and France have even licensed DASPs to serve in their regions freely. For instance, France has licensed Binance to offer crypto services there. Dubai has also approved a few crypto platforms, including FTX, to offer crypto services.

While the China FUD was expected to culminate with significant repercussions for the crypto space, it became easily forgettable. China had the largest hash rates of most cryptos, which made people fear that a blanket ban could collapse the crypto market. However, only the opposite happened as the crypto market surpassed $3T in market cap two months after the ban.

These developments show that crypto regulatory FUD should already be a thing of the past. Crypto will stay but in a safely regulated manner!


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