Psychology Assignment: Intervention For Cardiovascular Disease In Australia
Question
Task:
Read the case “cryptocurrencies”, and write a policy management assignment to address the following questions:
- What are main policy issues involved in cryptocurrencies?
- Why did the Chinese government decide to crack down on cryptocurrencies? What are main policy objectives? What are pros and cons of this policy?
- Why do different countries adopt different policies on cryptocurrencies? Would you expect to see convergence in policies across different countries? What would be the future for cryptocurrencies?
- What are lessons for policy-making on disruptive technologies such as cryptocurrencies?
Answer
Introduction
The present policy management assignment focuses on the topic of managing policy progress with its main emphasis on the case study of Cryptocurrency. The study describes the issues involved within the cryptocurrencies, the reason behind China’s crackdown of cryptocurrency, the reason why different countries adopted various policies on cryptocurrency and policy making of disruptive technologies.
Discussion
Main policy issues involved in cryptocurrencies
Since its inception in 2009, Cryptocurrency has been fraught with controversy, as it possesses the successive cryptocurrencies that also sprung up in its aftermath. While heavily condemned for its uncertainty, being used in malicious operations, and extortionate utilisation of electricity to extract it, some, especially in the emerging world, see Cryptocurrency as a place of refuge during financial hurricanes. However, as more people are turning to cryptocurrencies as an invested capital or a livelihood, such problems have embodied themselves in a slew of constraints on their use.
Security risk
As opined by Darwin Recruitment.com. (2021), Cyber criminals can obtain access to millions of accounts and electronic wallets in which cryptocurrencies are saved by attacking and trying to hack a cryptocurrency transaction.
One well-known instance was the Mt. Gox cyber - espionage mishap in 2014, which resulted in the closure of the Japanese interaction after huge amounts of money in cryptocurrency were stolen.
Market risk
The valuation of cryptocurrencies could fluctuate, just like the worth of any other invested capital. This comes as no shock b Because of the large number of unofficial and autodidact shareholders, they have viewed huge fluctuations in worth and increased susceptibility to news in a short period of time. When there is ongoing opposition to the adaptation of cryptocurrencies such as bitcoin, their value may fall. Cryptocurrency specialists, investors, and aspiring traders would continue to prognosticate on the long term of cryptocurrencies.
Reason for the decision of Chinese government to crack down on cryptocurrencies
Main policy objectives
For decades, the Chinese government has regularly started cracking down on cryptocurrencies, frequently shaping its activities as a means of mitigating investment risk. The identical explanation was given for its most severe crackdown on mining bitcoin, which began in May. Beijing has a pair of long-standing money considerations. The first is price fluctuations, which would seem to be the motivation for the prevailing crackdown. After the cost of bitcoin surpassed US$60,000 and then began to fall, Beijing began to crack down on extraction. It fell by more than 40% inside the two months that followed.
While Beijing has implicitly approved of cryptocurrencies as alternative investments, extreme volatility may cause some individual investors to lose their money. Another issue with distributed cryptocurrencies would be those who make it simple to avoid China's banking regulations, which prevent individuals from transforming more than US$50,000 in yuan into foreign banks each year. Since there are no limitations on bitcoin traders, it is simple to purchase large amounts of the digital gesture and quickly transform it into other exchange rates. Nonetheless, the charges are usually much greater than what individuals would earn through money transfers.
Pros and cons of this policy
Pros of cryptocurrency
As mentioned in Investopedia. (2021), When contrasted to exchanges performed with fiat exchange rates, Crypto currencies provide several advantages, including lower transaction fees and faster processing.Financial transactions benefit greatly from Bitcoin exchanges. The ability to make reimbursements with Bitcoin has enhanced as a result of technological developments such as the Lightning Network. Unbanked individuals can also conduct Cryptocurrency.
Cons of cryptocurrency
According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), the system is presently absorbing nearly 70 terawatt-hours (TWh) of electricity on an annualized rate, which is greater than the whole nation of Venezuela. It has thus fallen by half since reaching a high of 141.28 TWh on May 10.
So far, just local authorities have expressed concern regarding bitcoin's energy usage, but they have been tasked with assisting in appropriate respondents emissions targets. The nation has committed to achieving peak emission levels by 2030 and carbon neutrality by 2060.
Reason for adopting different policies on cryptocurrencies in different countries
Expectation of convergence in policies across different countries
The legal position of Cryptocurrency and other altcoins (alternate solution tokens to Bitcoin) obviously varies by nation, and in certain cases, the connection is not strictly delineated or is continually shifting. While the majority of the countries do not make Bitcoin use unenforceable, its prestige as a payment method or a commodity differs, with varying regulation ramifications. Some nations have imposed restrictions on how Bitcoin is used, with financial institutions prohibiting their customers from conducting cryptocurrency dealings. Other nations have openly prohibited the utilisation of Bitcoin and other cryptocurrencies, with heavy punishments in position for anyone engaging in crypto exchanges. For example, Throughout 2021, China has increased its crackdown on cryptocurrencies. The Chinese government has repeatedly warned their citizens to avoid the digital equity industry, and they have started cracking down on mines in the world as well as financial transactions in China and abroad.
Future for cryptocurrencies
As mentioned in Time.com. (2021), Since Bitcoin is the biggest cryptocurrency by market valuation, and the rest of the economy manages to pursue its trend lines, it is a great predictor of the bitcoin economy in particular.
Yet in 2021, the value of bitcoin has ranged from a maximum of $60,000 in April to less than $30,000 as recently as July. Bitcoin has subsequently re the $50,000 range. This uncertainty is one of the main reasons why experts suggest limiting the crypto investment opportunities to less than 5% of their investment to start with. People can surmise about the value of cryptocurrency for shareholders in the months and years ahead (and many would again), but the truth is that it is still a fresh and implausible expenditure with little heritage on which to counter prognostications. No matter what a particular expert believes or tells, no one truly knows. That is why it is critical only to engage what individuals are willing to start losing and to adhere to more traditional investment opportunities for long-term building wealth.
Lessons for policy-making on disruptive technologies such as cryptocurrencies
Cryptocurrency and blockchain technological advances, when combined with strong governance structures, could have improved the world's economic governance. Individuals did not, nevertheless, prosper in eradicating or even diminishing the importance of intermediaries. As demonstrated in Badii, F., (2021), The thing that is missing is revolutionary strategy and governance structures that could assist cryptocurrency in resolving the difficulties that financial firms have faced. People require establishments which are less governed, less centralised, and do not give states excessive control over exchanges. Cryptocurrency alone would not provide this.
Rather than eradicating intermediaries entirely, the prospect of cryptocurrency could blatantly lie in re-intermediation and revolutionising the financial sector. If individuals want cryptocurrency to be a better financial methodology than financial institutions, humans must look at how it is presently controlled by both authorities and foreign actors. People need to figure out the laws of the sport and see if they would help with good international access to untraditional financial intermediation. Alternatively, crypto businesses may devise novel remedies to adhere to the rules while preserving worldwide coverage. To start taking the first move toward revolutionary governance structures for cryptocurrencies, people must recognise that leadership is just as essential as innovation, and that technology would never prosper without inventive governance structures.
Conclusion
To conclude, the present study covers the topic of managing the policy processes that mainly focuses on the emergence of cryptocurrencies and the ways it is accepted in different nations. Moreover, the study describes the main policy problems, the crackdown of the Chinese government on cryptocurrencies, the different policies involved in different countries and lessons for policy making upon the disruptive technologies of cryptocurrencies.
References
Badii, F., 2021. Cryptocurrency: A disruptive technology in need of innovative governance - Internet Governance Project. [online] Internet Governance Project. Available at: <https://www.internetgovernance.org/2019/01/31/cryptocurrency-a-disruptive-technology-in-need-of-innovative-governance/> [Accessed 5 October 2021].
Darwinrecruitment.com. 2021. 4 Issues Facing Cryptocurrency Today. Policy management assignment [online] Available at: <https://www.darwinrecruitment.com/blog/2018/02/big-issues-cryptocurrency-today> [Accessed 5 October 2021].
Investopedia. 2021. What Are the Advantages of Paying with Bitcoin?. [online] Available at: <https://www.investopedia.com/ask/answers/100314/what-are-advantages-paying-bitcoin.asp> [Accessed 5 October 2021].
Time.com. 2021. [online] Available at: <https://time.com/nextadvisor/investing/cryptocurrency/future-of-cryptocurrency/> [Accessed 5 October 2021].
