What's the crypto regulation endgame?

Of the major economies, only China has begun to address it

In developing economies, cryptocurrencies have become a significant vehicle for avoiding taxes, regulations and capital controls, says the writer. PHOTO: REUTERS
New: Gift this subscriber-only story to your friends and family

With cryptocurrency prices plummeting as central banks start to raise interest rates, many are wondering if this is the beginning of the end of the bubble. Perhaps not yet. But a higher opportunity cost of money disproportionately drives down the prices of assets whose main uses lie in the future. Ultra-low interest rates flattered crypto, and young investors are now getting a taste of what happens when interest rates go up.

A more interesting question is what will happen when governments finally get serious about regulating Bitcoin and its brethren. Of the major economies, only China has so far begun to do so. Most policymakers have instead tried to change the topic by talking about central bank-issued digital currencies (CBDCs).

Already a subscriber? 

Read the full story and more at $9.90/month

Get exclusive reports and insights with more than 500 subscriber-only articles every month

Unlock these benefits

  • All subscriber-only content on ST app and straitstimes.com

  • Easy access any time via ST app on 1 mobile device

  • E-paper with 2-week archive so you won't miss out on content that matters to you

Join ST's Telegram channel and get the latest breaking news delivered to you.