Not a security, nor a commodity: legal currency -Part 3

Si Gyeongmin

Sep 23, 2021

3. Since a currency is usually guaranteed by a commodity or a government’s ability to collect taxes and defend, it is considered a security.

4. According to these definitions, bitcoin with a lowercase letter "b" is a commodity rather than a currency, and a Bitcoin with an uppercase letter "B" is the technology or network that Bitcoin spreads. This is like shale technology and shale oil.

Currency is "guaranteed" in an important conceptual way, just as the community is interested in the value of its currency. However, the quotation in Judge Weinstein's judgment highlights how inconsistent our regulatory categories are with the functional analysis of economists. We may not think that Bitcoin is a traditional legal currency, because the issuance of Bitcoin itself does not involve the participation of sovereign states, which is a difference related to the existing political legitimacy and transparency norms. However, cryptocurrencies are increasingly similar to traditional government-issued central currencies and should not become its unregulated basis.