Legalization in the financial world
In the context of the financial world and particularly cryptocurrencies, legalization refers to the approval of a particular financial product for private investors. Examples of services once only available to banks or the big speculators are derivatives of all kinds, such as warrants and certificates.
Occasionally, crypto money is prohibited by a state or is restricted in its trade. After all, each country owns the right to supervise and control financial affairs on its territory.
Crypto money is sometimes considered as a competitor to classic currencies, putting them at risk of being discarded. In fact, the cryptocurrencies do have certain advantages,
Why is legalization mandatory?
Once it is illegal to possess a particular financial product or trading purposes, failure to comply with this rule means committing an offence. Today, it is mainly authoritarian states that want to control all areas of finance and ultimately their citizens.
Legal trade is only possible after legalization. Cryptocurrencies are an excellent way to avoid the all-powerful control of the state. They can be easily exchanged and there is no access to transactions, thanks to the third-party blockchain.
Not least, in uncertain times, they are a good choice to avoid inflation. Legalization occurs when a previously banned financial product is permitted for the mass market.
In many cases, financial regulators examine new financial models in great depth. They want to gain at least partial control over the financial markets. Cryptocurrencies are legal in Germany, and a popular form of investment.