The
year 2017 was a significant one for cryptocurrency. The most famous of these
currencies, Bitcoin, progressively continued to break its all-time high in
value throughout the year, with many in the industry speculating that it is on
track to break the $20,000 mark, up from just under $1,000 this past January.
In June, cryptocurrencies as a whole reached $100 billion in total market
capitalization—a feat it accomplished over the course of nine years—only to top
$500 billion about six months later.
To
say that it was a banner year for cryptocurrency would be an understatement,
and the digital currency shows no sign of slowing down in 2018. However, in
spite of the burgeoning interest in cryptocurrency as an investment and its
demonstrable success, it remains unregulated, which has sparked growing concern
among many familiar with the industry.
On
one hand, the simple fact that cryptocurrencies have been allowed to flourish
in an unregulated environment has played a definitive part in their growth. Currently,
there are over 1,100 cryptocurrencies for people to trade in within financial
markets globally. However, since the total market value of all digital
currencies recently surpassed that of JP Morgan in size, many believe that
regulation within this sector is necessary to keep investors safe and prevent
the failure of a market that is growing with each passing day.
While
some argue that the regulation of cryptocurrencies will prevent them from
serving their intended purpose, the case for regulation is strong. A lack of
regulation enables a degree of systemic risk and opens the market up for
exploitation, ultimately weakening the cryptocurrency market as a whole and
causing many who invest in it to lose large sums of money.
One
group leading the charge to introduce regulatory initiatives to the
cryptocurrency market is the ICO Governance Foundation (IGF), a decentralized
global group and Swiss foundation. The purpose of the IGF is to create an
international body that performs self-regulatory processes for ICOs within a
wide range of decentralized capital markets around the world. The group
develops best practices and standards in line with those established by
national organizations such as the SEC and China Securities Regulatory
Commission (CSRC), among others, and works with the foremost blockchain
companies to create a market where ICOs work fairly for investors.
The
IGF recently came one step closer to attaining its vision, as it recently
formed an alliance with several other organizations in the technology industry
to act as an international regulatory body that evaluates the quality of ICOs.
In conjunction with the blockchain group Waves Platform, open software platform
Ethereum, and the global auditing services firm Deloitte, the IGF will work to
provide tax and accounting, reporting, legal, identity verification, and due
diligence services to companies holding ICOs and other firms related to the
blockchain industry. The group, which will be based in Switzerland, will focus
on developing guidelines for those undertaking ICO projects as a way to
establish the industry’s professionalism and create a strong foundation for it
to function and thrive into the future.
