Although regulators in several jurisdictions of the world have introduced some guidance for crypto industry participants since the start of the year, the lack of regulatory clarity remains a hurdle for the emerging industry, according to a new study by Digital Currency Group.
Digital Currency Group, an industry leader in terms of investment into crypto and blockchain-related startups, reportedly conducted a survey that saw 60 CEOs out of its 140 portfolio companies share insights into the factors hindering the growth of the space.
Notably, 53% of survey respondents characterized the regulatory environment as “public enemy #1,” to the industry, placing it ahead of other challenges such as a possible economic downturn and cybersecurity/hacking risk, and lack of mainstream understanding.
Another critical parameter acquired from the survey is that a quarter of respondents described regulatory compliance as their greatest challenge last year with issues around securing bank accounts and insurance being the most prevalent.
Given last year’s difficulty, it could have been expected that regulators step up with more clarity for the industry, but that has not happened as 31% of survey respondents named the lack of regulatory progress during 2019 as the “most surprising development of the year.”
There are also concerns that the increase in regulatory oversight could constrict, instead of stimulating the growth of the industry with industry leaders wary of the fact that “things could get worse as global policymakers call for increased oversight in the wake of Facebook’s Libra announcement.”
Global Progress on Crypto Regulation
While acknowledging the lack of complete regulatory clarity, the study explained that progress on the regulatory front varies widely by country.
In France and Canada, for instance, efforts to regulate the industry have hit top gear with French authorities introducing a regulatory framework and Canada in the middle of approving a set of proposed rules.
Similarly, the U.S SEC issued an allegedly not-so-clear guideline on how it classifies cryptocurrencies, while India went the other way round by introducing “draconian legislation that has effectively banned digital currencies in the country.”
Understandably, the regulatory landscape for the crypto industry is expected to get brighter as more countries define their stance on the emerging space.