ETH merge is the obstacle to crypto regulation

According to a recent report published by the International Monetary Fund (IMF), crypto assets have shifted from being specialized products to being more widely used in recent years (IMF). Therefore, the government must adopt more specific policies to manage the industry.

The report's co-authors, Aditya Narain (director of capital markets at the IMF) and Marina Moretti, his assistant, stated that crypto assets are now valuable as payment tools, speculative investments, and hedges against weak currencies. Both of these observations were made in the report.

In addition, the authors mentioned that the recent failures of virtual asset providers (crypto exchanges, issuers, and hedge funds) constitute the impetus for regulators to adopt applicable crypto policies.

However, Narain and Moretti point out that various challenges make it difficult for regulators to design proper BTC rules. These challenges include the inability of regulators to use their talents effectively, the rapid evolution of the market, and the effort to monitor the actions of the market.

The regulatory bodies have several competing goals, and their resources are quite limited. Because of this, they are having trouble acquiring the knowledge and capabilities necessary to keep up with the rapid rate of industrial change.

The paper also issues a call to action to the various regulatory bodies, urging them to adopt a unified and coordinated strategy regarding cryptocurrency regulation. As a result, there is the potential for a global regulatory framework consistent with cryptocurrencies.

IMF's Narain and Moretti observed that crypto regulation is a "white whale" due to rapid innovation, inconsistent nomenclature, and a lack of staffing and data collecting, and this refers to the ETH merge. So, what are some of the options?

IMF warns that BTC regulators face many challenges

The above authors also argued that standard financial regulation does not cover various issues of BTC legislation. As a result, they propose that the process of creating the policies be distributed among the many regulators.

The regulators will then be able to merge the policies into a single worldwide crypto policy that is comprehensive. Some people may concentrate on the BTC actors, such as those who build protocols, mine cryptocurrencies, and validate transactions. Others can focus on the safety of consumers, the integrity of the financial system, or both.

There have been multiple meetings organized by global financial authorities to discuss the most effective methods for regulating the BTC industry. Within the next month and a half, Europe intends to publish the final text of the Markets in Crypto Assets (MiCA) BTC regulation that has received significant attention.

The United States' response to the most pressing concerns regarding BTC business is proposed legislation called the "responsible financial innovation act." Even MPs opposed to BTC, who had previously pushed for a complete prohibition on the use of cryptocurrencies, now embrace the idea of regulating the market rather than outright prohibiting it.

US Congressman Brad Sherman is the latest anti-crypto congressman to change his position, shifting from calling for a complete ban on cryptocurrency to calling for the sector to be regulated. Sherman believes that an absolute prohibition cannot be enacted since the industry has amassed so much wealth and power in recent years. If the authorities consider the recommendations made by the IMF in this study, it will be in everyone's best interest, including investors, players, ETH merge, and regulators.