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Governments should regulate, not entirely ban, cryptocurrencies

System of rules best way to deter money-laundering and support central banks

| India
A blanket ban is more effective than regulation only if the ban creates sufficient deterrence.   © Reuters

Faced with the disruptive power of cryptocurrencies such as bitcoin and ethereum, many central banks are considering laws to regulate their use. Other countries have already come down against them: China has banned cryptocurrency exchanges while India has stopped banks from dealing with anyone using cryptocurrencies.

You can understand why governments are wary: cryptocurrencies erode the monopoly of central banks to issue and regulate currencies. But the debate remains live whether regulation or a blanket ban is the better strategy for controlling the misuse of cryptocurrencies.

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