Extreme price volatility alone isn't the most defining aspect of 
blockchain-based digital currencies, which we usually refer to as 
cryptocurrencies. One aspect often overlooked by retail investors is the 
conflicting views of governments, regulatory bodies and private players on 
cryptocurrencies. No two countries or regulators seem to have an identical 
viewpoint on cryptos.

   Developed countries have near-consensus – Cryptos are risky

   Almost every high-ranking official and politician either vehemently opposes 
the rise of cryptocurrency investment or maintains a cautious silence. Senator 
Elizabeth Warren is a vocal critic of cryptos, and in the Senate hearing titled 
'Cryptocurrencies: What are they good for', she spoke about the systemic risk 
of the space on the broader US economy.

   SEC Chair Gary Gensler took a balanced approach when he spoke about 
cryptocurrencies at the Aspen Security Forum. Janet Yellen ripped into 
'extremely inefficient and volatile' cryptos just a month after she took over 
as the Treasury Secretary.

   Contradictory stance in emerging economies

   Emerging economies matter more to investors than developed ones. Foreign 
institutional investors have been bullish on China and India to find an 
alternative to developed economies where growth has slowed.

   China became the first major economy to outlaw cryptocurrencies. The 
People's Bank of China has declared all crypto-related activities 'illegal 
financial activities'. This effectively makes it a criminal offence in China to 
hold or trade or mine cryptos. Elsewhere, they remain unregulated but not 
unlawful.

   Contrary to this, India has called a meeting of stakeholders to deliberate 
on cryptocurrencies' opportunities and challenges. The Reserve Bank of India 
had banned crypto services offered by banks in 2018, a decision that the 
country's Supreme Court upturned in 2020. The country's finance ministry is 
also looking at ways to bring crypto trading under the tax ambit, and a bill in 
this regard may be presented soon.

   In Indonesia, the country with the largest Muslim population, the leading 
religious council has called out cryptos as 'haram'. In Brazil – a member of 
the BRICS grouping – a congressman has proposed a bill to legalize Bitcoin.

   Multi-lateral meet on cryptocurrencies

   The contradictory stance of various governments and regulatory authorities 
may confuse crypto investors, especially in the retail space. Any hostile 
announcement on cryptos by a specific economy deals a blow to the prices of 
crypto assets such as Bitcoin, which grabs the lion's share of news headlines.

   This makes a convincing case for a multi-lateral meet of both developed and 
emerging economies to find common ground. Trillions of dollars are locked in 
crypto assets, and any major upheaval can spill over into the wider financial 
world.

   These contrasting developments in the cryptocurrency investment space can be 
daunting for retail investors, who often base decisions on market tailwinds. 
Much of the bull run in the crypto space was powered by retail investors in 
2020 and 2021. Any widespread negative sentiment among this class might lead to 
an impulsive and heavy outflow of funds, and thereby a big correction in 
cryptos' market value.

   Media Contact: 
   Honey Bhargava 
   honey.bhargava@kalkine.com.au 

   Logo: https://mma.prnewswire.com/media/1341740/Kalkine_Logo.jpg 


   Source: Kalkine Media