Cryptocurrency and the State: An Unholy Alliance

USC Gould School of Law Interdisciplinary Law Journal, Volume 31

Duke Law School Public Law & Legal Theory Series No. 2020-67

21 Pages Posted: 12 Oct 2020 Last revised: 5 Oct 2021

See all articles by Lee Reiners

Lee Reiners

Duke University School of Law; Duke University - Global Financial Markets Center; Global Financial Markets Center at Duke Law

Date Written: 09 01, 2021

Abstract

This article contextualizes the rise of cryptocurrency within the historical relationship between money and the state. It begins by asking two simple yet critical questions: What is money and where did it come from? Armed with the answers, the article proceeds by taking a fresh look at cryptocurrency through the lens of the credit theory of money. It finds that cryptocurrency, by using new technologies and incentive-based design, attempts to overcome the previous geographic limitations that hindered broad adoption of private currencies. Even with these innovations, cryptocurrency appeared unlikely to challenge the supremacy of sovereign money until Facebook announced the Libra project. Policymakers around the world instantly recognized the threat and opportunity Libra posed given Facebook’s scale. Facebook may not be a sovereign entity, but its power rivals that of most countries. Libra compelled a flurry of new proposals in the U.S. to address the fragmented nature of cryptocurrency regulation. In choosing next steps, Congress and regulators must be careful to ensure that regulatory clarity does not come at the expense of sovereign authority.

Keywords: Money, Cryptocurrency, Bitcoin, Libra, Chartalism

JEL Classification: B10, B20, E42, E58, K22, N10, P16, P26, P44

Suggested Citation

Reiners, Lee and Reiners, Lee, Cryptocurrency and the State: An Unholy Alliance (09 01, 2021). USC Gould School of Law Interdisciplinary Law Journal, Volume 31, Duke Law School Public Law & Legal Theory Series No. 2020-67, Available at SSRN: https://ssrn.com/abstract=3682724 or http://dx.doi.org/10.2139/ssrn.3682724

Lee Reiners (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Duke University - Global Financial Markets Center ( email )

210 Science Drive
Durham, NC 27708
United States

Global Financial Markets Center at Duke Law ( email )

210 Science Drive
Durham, NC 27708
United States

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