Banks and regulators unable to keep up with speed of crypto

The cryptocurrency sector is moving at breakneck speed compared with banks and regulators in the traditional financial sector. Even hiring crypto experts is a major obstacle, as the best talent is in high demand industry wide. 

Crypto is too fast to keep up with

Whether the traditional banks, regulators and other infrastructure like it or not, crypto is changing finance, and business in general at a crazy rate and the sedate pace of trad finance and its watchdog regulators means that they are just not able to keep up.

Admittedly, the wild rollercoaster ride of crypto is coming up against snags here and there, and the odd company has disappeared overnight given such things as code hacks and lack of liquidity among other issues.

New tech is moving traditional finance aside

However, this industry will likely throw up the game-changing technologies that will make banks and their ilk completely redundant. The fact is, that is already happening now.

Bitcoin itself is looking like it will move gold aside as the preferred store of wealth. It just needs to grow enough so that volatility plays less and less of a role in its price swings. The fact that it can’t be manipulated as much as gold also plays in its favour.

Insufficient staff to regulate crypto

The Securities and Exchange Commission (SEC) was said to be going on a hiring spree this year as the sheer amount of crypto companies, and the variety of technologies that they employ, are taxing the regulators to the max.

Also, just recently, the chairman of the European Banking Authority (EBA), which is the regulator for the European banks, has voiced his concerns over sourcing the experts necessary to oversee crypto and enforce regulations. 

The EBA’s Jose Manuel Campa is worried that by the end of the next 3 years, crypto will have developed and extended into so many areas that cannot be anticipated, that he will not have the crypto talent at his disposal in order to lay down and enforce the new regulations to cover everything.

Regulators just too far behind

Regulations for the industry are nowhere near ready, and if truth be told, asking regulatory agencies steeped in old laws, to define a new set of rules to regulate game-changing technologies, is a bit of a stretch.

SEC chairman Gary Gensler just keeps harping back to securities laws that were put in place in the early part of the last century. Given his way, he would put the entire crypto industry into a strait jacket that would make it just as bogged down and slow-moving as existing finance.

The cost of doing business

As the larger crypto exchanges and lending platforms are finding out, doing business within the current regulatory environment is costing them millions when you take into account the amount of specialised staff needed to navigate the treacherous waters of regulatory minutia contained in the many financial jurisdictions across the world.

Banks and financial institutions in the traditional world move like they are wading through treacle. Is this how we want our future financial system to be? The institutions that rule us would have it so. Therefore it is to be hoped that a parallel financial system can grow fast enough to evade the octopus-like tentacles of what is in place now.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: https://cryptodaily.co.uk/2022/07/banks-and-regulators-unable-to-keep-up-with-speed-of-crypto