Cryptocurrency Regulations and Their Impact on Investor Trust: Opportunities and Challenges

Ali Saeedi () and Mandana Taheri ()
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Ali Saeedi: University of Minnesota
Mandana Taheri: Allameh Tabataba′i University

Chapter Chapter 9 in The Cryptocurrency Market, 2025, pp 183-210 from Palgrave Macmillan

Abstract: Abstract This research investigates the impact of cryptocurrency regulations on investor trust. It focuses on how regulatory frameworks address risks such as money laundering, financial terrorism, tax evasion, and price volatility. Through a comprehensive review of global regulations, particularly actions from the Financial Action Task Force (FATF) and various governments, this chapter reviews how regulation affects operational, liquidity, and market risks in the cryptocurrency market. The analysis also examines the role of Central Bank Digital Currencies (CBDCs) as a secure alternative. The review and discussion suggest that clear, well-structured regulations and investor education are crucial for building trust in this evolving financial ecosystem. The analysis indicates that while cryptocurrencies have potential for financial innovation, sustained trust depends on implementing effective regulatory frameworks and enhanced investor awareness of associated risks. Thus, this chapter calls for a balanced regulatory approach that protects investors without constraining innovation in the evolving cryptocurrency ecosystem.

Keywords: Cryptocurrency regulations; Investor trust; Financial risks; Tax evasion; Money laundering; Financial terrorism (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psincp:978-3-031-90542-1_9

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DOI: 10.1007/978-3-031-90542-1_9

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