50 Pages Posted: 11 Jan 2019 Last revised: 24 Aug 2020
Date Written: December 31, 2018
What are cryptocurrencies: securities, commodities, or something else? Maybe they are a new form of established currency ― a non-sovereign fiat currency. Like other self-governing bodies, the communities that issue cryptocurrencies should be judged on how well they support their currencies. This analysis is not meaningfully different from how we have evaluated traditional sovereign issuers of currency. Indeed, as traditional-sovereign-issued currency becomes entirely digital, functional distinctions between traditionally sovereign-backed fiat currency and widely-accepted non-sovereign fiat currency start to disappear. The primary way then to distinguish the value of such currencies from each other becomes the quality of their institutional backing. Through that lens, some self-governing online communities are better-organized and more supportive of their currencies than traditional sovereigns.
By shooting across the bow of the securities-versus-commodities debate, this Article calls on regulators and academics to rethink their assumptions about cryptocurrencies and the communities that develop them. We should recognize well-institutionalized cryptocommunity currencies as non-sovereign fiat currencies and regulate them accordingly.
Keywords: cryptocurrency, cryptocurrencies, securities, commodities, currencies, regulation, sovereign, community
JEL Classification: K1, K11, K2, K20, K22, K23, K29, K33, K42, G00, G20, G21, G23, G28, G29, G38, G39, Z1, Z10, Z18, Z19
Suggested Citation: Suggested Citation