U.S. Cryptocurrency Regulation: A Slowly Evolving State of Affairs

38 Pages Posted: 15 Sep 2022

See all articles by Aaron Poynton

Aaron Poynton

London School of Economics and Political Science

Date Written: August 29, 2022

Abstract

After nearly a decade and a half since the creation of the first cryptocurrency, crypto regulation in the United States is fragmented, with different measures taken at the federal and state levels, and even within and among agencies. This sluggish speed is not necessarily a surprise as government regulation has always chased rapid advancements in technology and associated consumer and market behavior changes. However, this is a precarious position for the United States--and the world--as the U.S. is a leader in the global financial community, the high concentration of crypto-based wealth, and economies’ increasingly interconnected and interdependent nature. This working paper examines the history of currency; features of cryptocurrency, especially those features which make it prone to regulation; the United States’ efforts to regulate cryptocurrency, reviewing current and proposed regulatory efforts; and lastly, this paper concludes with an analysis of the research and provides suggestions to lawmakers and regulators. The central theme of the analysis will opine that cryptocurrencies, and their tangencies, such as the crypto-ecosystem they live within, increasingly pose a systematic risk to global financial markets. Nevertheless, any regulation must be balanced not to smother emerging crypto markets and financial technology innovation.

Keywords: cryptocurrency regulation money currency

JEL Classification: E42, K20, K00, K23, K29, E50

Suggested Citation

Poynton, Aaron, U.S. Cryptocurrency Regulation: A Slowly Evolving State of Affairs (August 29, 2022). Available at SSRN: https://ssrn.com/abstract=4204063 or http://dx.doi.org/10.2139/ssrn.4204063

Aaron Poynton (Contact Author)

London School of Economics and Political Science ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

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