Crypto Terms: Letter U

What does Unregulated mean?

Unregulated MEANING:
Unregulated - The term Unregulated defines the absence of control by a central authority.
2 minutes

Let's find out Unregulated meaning, definition in crypto, what does Unregulated mean, and all other detailed facts.

Unregulated is a term used to describe a situation where formal regulations or obligations are not established by a central authority. Usually, the purpose of said rules is to protect participants partaking in a specific activity. 

In the matter of trading, when a market is unregulated, investors remain vulnerable to malicious individuals and groups that partake in a wide range of criminal activities such as fraud, bribes, corruption, and other crimes as well as financial malpractice.

On the other hand, the crypto industry is no stranger to a lack of regulations. Even though the blockchain technology that facilitates crypto transactions operates based on a key set of principles. While cryptocurrencies don’t have a strict set of rules, it still remains unclear whether they should be considered regulated or unregulated.

Is Cryptocurrency Unregulated?

Before we dive in further, keep in mind that the crypto sector hasn’t been established in many countries. Therefore its main features like blockchain technology remain within a gray area when it comes to introducing regulations. In turn, different countries have different rules, and the regulatory agencies assigned to supervise cryptocurrencies introduce conflicting rules as well.

It’s important to note that these regulatory bodies don’t have the authority to officially regulate cryptocurrencies as of yet. Although they have taken action regarding them in the past. 

Generally speaking, cryptocurrencies such as Bitcoin and Ethereum haven’t been regulated by a government or a central bank. If this were to change, it would have a strong impact on the cryptocurrency’s value. 

Proper regulations have the potential to establish more trust when it comes to cryptocurrencies which could play a key role in making them a widely accepted medium of exchange. This invites more opportunities which in turn attract more investors.

However, an abundance of rules, obligations, and regulations can stop the development and implementation of innovative technologies within the industry. 

Besides, a central authority might cause individual and small to medium investors to lose confidence in cryptocurrencies which could mean fewer investments.  In that case, we could see a decrease in the growth of the market or a crash altogether.