Bitcoin and other cryptocurrencies have seen a surge in value and popularity in recent years, but many issues still need to be addressed before they can become mainstream. One of the biggest problems is the lack of governance, which has led to chaos and volatility.
Currently, governance structures in the cryptocurrency industry are not well-defined, and there is no official way of resolving issues that arise. So how do consumers go about making decisions in completely decentralized networks? By implementing better governance structures, digital currencies can become more stable and usable by the public.
Here are some early stages of centralization that show how authorities can streamline the industry.
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Stablecoin Pilot Program
A Stablecoin pilot offers support to assure the public about centralized cryptocurrencies. As part of this initiative, stabilized coins are being used to increase liquidity and ease settlement across the expanding crypto ecosystem.
This program works as a centralized institution that provides a solution to the volatility of cryptocurrencies. The pilot has been successful and is improving with each subsequent launch.
The sale of cryptocurrencies is a hot debate issue in many countries, with different jurisdictions taking various approaches to the regulations. In response to this challenge, the Chamber of Digital Commerce has set up an advisory panel that provides advice on what types of sales can be considered securities and what should be defined as commodities. This initiative will provide much-needed clarity on the regulation of sales, which will help increase consumer confidence.
As part of the sales regulations process, the SEC must adequately identify tokens to prevent fraud. The SEC also requires each platform to exchange tokens with future access rights without registering as a national securities exchange.
Coin Listing/Trading Standards
These standards are applied to maintain financial stability for investors and reduce premiums and volatility. As part of this process, exchanges must be transparent and accountable in their coin listing processes.
It involves official review by regulatory bodies to protect investors and ensure that the coins are operated legally. This way, all coins will be treated equally, and exchanges will have to meet specific criteria before regulators can list the transaction.
Reserved Institutional Accounts
It is a way for financial institutions to participate in the cryptocurrency markets safely and securely. As a result, it provides a solution to many of the compliance issues banks face when dealing with cryptocurrencies. It also provides an extra layer of security for the consumer, as the trades are executed on a segregated basis.
You can set up reserved institutional accounts to handle multiple cryptocurrencies across multiple exchanges, generally using only one account number with the underlying assets held by the investor. This approach allows investors to manage their money more efficiently without going through multiple accounts.
This initiative is designed to provide tax advice on cryptocurrencies, which will be beneficial for digital currencies in helping them stay compliant with existing tax laws.
The program involves collaboration between regulators, industry leaders, service providers, and retail consumers.
Miner Certification Program
This program allows miners to show transparency before the public through an official certificate. The program also works to increase overall security because it verifies that all mining pools comply with basic network consensus rules.
Certification of TGE Operators
This program provides a framework to ensure all token generators are qualified to provide the required services. Thus, only trusted individuals/entities will generate tokens that can then be listed on regulated exchanges.
A token generation event is a way to get people interested in your crypto project. You can have it at a time that might help people pay more attention. Thus, having a TGE is one of the easiest ways for new people to learn about your project and invest in it.
ICO Certification Program
This program will allow customers to confirm they are dealing with a trusted token issuer who is providing accurate information. The certification process involves an audit of the ICO’s smart contracts and source code and can be used to establish a high level of confidence for investors.
This certification program also gives customers extra information about the project and how it works, which will help them better understand what they are investing in and its benefits.
The above initiatives aren’t solely meant for cryptocurrency investors- they also help strengthen blockchain technology as a whole. This new way of managing digital currencies also prevents the market from external factors such as politics, national borders, and even terrorist groups. It means that these currencies will be less exposed to extreme price swings and other risks, which can help them gain more mainstream acceptance in the future.