Cryptocurrencies were made to limit or eliminate the control held by the financial system and governments over money and people. This is no conspiracy theory, Satoshi Nakamoto was very clear and vocal about this point when he first launched Bitcoin roughly a decade ago.
Crypto, the world’s governments and regulations.
As the world’s governments realize that, they are trying to exert some form or control (or at least, regulation) over the cryptosphere and blockchain technologies in general. The reasons to try to impose regulation are reasonably obvious.
First of all, digital assets, unlike their fiat cousins, are inherently global. That makes them less volatile (yes, that’s true, surprising as it may seem) and immune to local politics or national political or economic problems. The second reason is even more apparent: effective regulations make for effective tax collection on cryptocurrencies.
The Mexican Stand-off
The world is slowly but surely moving towards cryptocurrency and blockchain solutions adoption with BitCoin and XRP leading the way. As things mature in that regard, attempts to regulate digital money are appearing in several countries in the world. Mexico is the latest example, as the federal government is preparing to introduce some rules to regulate cryptocurrencies within the country.
The Official Federation Daily published an announcement by the country’s central bank (the Bank of Mexico) in which it states an intention to introduce laws that will clarify the country’s position on digital assets. Previous efforts to provide a definition for alternative coins in the country indicate that the country could classify digital currencies as property subject to taxation but not as legal tenders, like the government-issued Peso.
There is a general consensus on the advantages that blockchain technology brings to the table, but also in that there is a need to regulate it in some way, preferably a way that encourages further development and grants enough freedom so that innovation is not hampered.
Creating legislation that can balance efficacy with total control, will be a tricky proposition, though. The proposed laws should not give the government a strong hand, or enable it to stop crypto-based transactions in a terse notice. Mexico is one of the world’s remittance hubs and a country in which Ripple is working extra hard to create payment corridors with the rest of the world.
Ripple’s XRP price analysis
As we write this, Ripple’s XRP is trading in a very narrow range of four cents. This is a very solid token, it’s the world’s third largest by market capitalization, but it’s under pressure, and it hasn’t broken the 34 cent barrier, which is the critical current resistance level.
Unless something extraordinary happens, the right way to go about Ripple now is to be neutral and not to execute long positions unless the price, at last, breaks over the 34 cent barrier supported by high transaction volumes (at least 15 million on average).
That rally would confirm the previous bull run on XRP (which happened on Jan 29-30), and the one on Feb 25 (which came about because of the Coinbase listing).
If the price goes above 40 cents, then the bulls will have their day and could launch the token’s worth all the way to 60 cents by mid-Q2 this year.
Image courtesy of Pixabay.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.