Crypto enthusiasts repeatedlyrefuse the regulatory write-ups. It waspresumed that cryptocurrency would be a fad and it was felt that thecryptocurrency would collapse under the weight of its expectations.

Paul Krugman predicted that theBitcoin would be yet another bubble which will burst very quickly. However, the cryptocurrency does not seem togo away as a fad.

Jerome Powell, in his semi-annualaddress to the House of Representatives in the Financial Services Committee,concluded that the current rules and regulations might not suit digitalcurrencies. He stated, "It'ssomething that does not fit easily within our regulatory scheme."

Several national andinternational players are getting pretty serious about the regulation ofcryptocurrencies. The regulations are,in a way going to the very core reason for why the cryptocurrency came in tobeing. Ultimately, the pseudo-anonymityand the non-permissioned systems will be curtailed with regulation. With alittle compromise, cryptocurrency will be able to move forward to contribute ina great way to the banking and finance sector.

While regulation is essential,this does not mean that the cryptocurrency should be thrown entirely out of thesystem. It is quite possible for thetraditional financial systems and the crypto startups to co-exist.

The Federal Reserve Chair isintimidating to create an agency, which has exclusive responsibility for regulatingthe cryptocurrencies. This entity willbe one that will be residing in the borders between the public and the privatesectors.

After the regulatoryintervention, cryptocurrency should be a better version of itself, and itshould not be a different and a worse one. The substance and style of legal regulation should adapt tocryptocurrency and vice versa. Rules might involve imposing license, auditing,disclosure, and more.

There might be a need for thecode writers to ensure that the identity of those involved in the transactionsis maintained anonymous; however, their details should be stored in aretrievable format in a separate register. Conditions will be imposed on constraints about data storage and limitedconfidentiality. These will be doneequitably in a way to protect and balance the individual rights of investors.

In the current regulatoryscenario, cryptocurrency will be able to survive only if the compromises aremade and the tradeoffs are made between the regulators and the cryptocurrencyagency. This is in a way to ensure agenuine alternative to mainstream money and related transactions.