“It will be very difficult for the U.S. to properly regulate cryptocurrencies”, says Charles Hoskinson

According to Hoskinson, the classifications used by the U.S. to pigeonhole each cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. make it very difficult to think of a possible regulation for the common digital assets.

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The CEO of IOHK / IOG and principal developer of Cardano, Charles Hoskinson, pointed out this week that the regulatory system in the U.S. is ill-equipped to handle the revolutionary nature of cryptocurrencies, so they would not be prepared to effectively regulate the large number of cryptoassets that exist to date.

The difficulties of regulating cryptocurrencies in the U.S.

Hoskinson’s remarks came during his telephone interview for the Digital digital technologies are these electronic tools that have the ability to generate, store or even process data. Assets and Cryptocurrencies Summit organized by the media Financial Times where the main figure behind Cardano highlighted the difficulties faced by regulatory agencies in the US, especially in light of the boom in these assets in both domestic and international markets.

In this regard, Hoskinson pointed out that in the U.S. regulations go by categories, as some apply to securities, others to commodities and the remaining one points to things that can be considered currencies. It is from this point where regulators begin to build the evaluation for each case, but it can happen that many cryptocurrencies contemplate two or more of these categories from its premise and usability.

In this regard, Hoskinson highlighted the case of Bitcoin, which can be considered a currency currency is a medium of exchange that defines value. because it is already formally a currency in El Salvador, or it can be considered a commodity like gold. Here the difficulty a measure of how hard it is to validate a new block on a blockchain. for regulators lies in properly categorizing the asset, and consequently determining the legal treatment that would apply to the cryptocurrency, taking due care that all the guidelines really apply to all the generality of things that can be done with the digital currency.

The potential of Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. and smart contracts

Regulatory issues aside, Hoskinson made a few mentions of the potential for Blockchain and smart contracts citing some use cases that could benefit from these technologies.

Among those mentioned, the executive behind Cardano highlighted ESG standards, which are used by the world’s most prominent centralized a centralized organizational structure is one in which a single node or a small number of them are in control of an entire network. entities to establish criteria for the environmental friendliness of project operations. Here Hoskinson pointed out that definitions are left to the discretion of the responsible bodies, so they can be lax and biased depending on who they apply to and in what jurisdiction.

In this regard, he stressed that Blockchain and smart contracts could serve to create new standards that standardize definitions, procedures and compliance rules, all in a totally reliable and transparent way. In this way, the real problems associated with global warming and climate change change — a concept relevant to cryptocurrencies that use the UTXO model — is the number of coins sent back to a user after they use their unspent outputs to initiate a transaction. could be addressed.

On the other hand, he also stressed that business processes could be much more reliable if they were backed up by Blockchain and digital currencies, as this would make them much more reliable and would not require the intermediation of trusted third parties. In that sense, he backed up his argument by quoting Bitcoin, whose most emblematic use case was the fact that it made it possible to exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. value between peers without any kind of manipulation by external entities.

Smart contracts are the application of the sense of decentralization the handover of control from a central authority to several different custodians. and immutability beyond cryptocurrencies, because the systems that implement them are not subject to political conditions, outside interests or extraordinary conditions, they are lines of code that are executed automatically when the originally established conditions are met.

And finally, Hoskinson closed with this idea:

“[Blockchain] is not influenced by the politics of the day or the geopolitics of larger nations over smaller ones…it doesn’t care who you are or where you are…the code the action of coding is to write programming statements for a program. simply does the work.”