Risks and Regulations

In this video, Diego Zuluaga, Principal at Fingleton, weighs in on some of the purported risks related to Bitcoin and other cryptocurrency and whether regulation offers solutions.

In the last video, you learned how the United States regulates cryptocurrency assets on a federal level. Countries such as Singapore, Switzerland, and the United Kingdom aim to mitigate risk to investors by classifying tokens as payment tokens, security tokens, and utility tokens, and regulating them accordingly.

Diego also talks about the potential of cryptocurrencies to disrupt global financial stability, which would require widespread adoption as a medium of exchange. At this time, no cryptocurrency – even Bitcoin – has enough adoption to impact central banks in leading countries. However, it is being adopted in some countries with very unstable economies.

Discussion: Diego notes that one reason cryptocurrency does not pose a threat to global economies is that it does not have significant adoption. Do you believe we will see widespread adoption of cryptocurrency as a medium of exchange and, if so, when? What factors do you think will impact adoption?

Optional: Read more about how open and public cryptocurrencies can offer some Venezuelans relief from hyperinflation and authoritarian monetary policies.