Bitcoin’s Backers Now Want Acceptance from the System they Sought to Supplant


In the aftermath of the global financial crisis, Satoshi Nakamoto — a digital nom de currency — published a white paper laying out his or her vision for an electronic, peer-to-peer currency that could provide an alternative to the failures of Wall Street, the regulatory structure, and the rest of the financial system as it stood.

Ten years later, the digital currency industry wants something from those same entities that might have been unthinkable to Bitcoin’s early libertarian and anarchist evangelists: Acceptance.

For example, the Winklevoss twins (of Facebook fame) are trying to form a self-regulatory organization for cryptocurrency exchanges, similar to those that exist for investment brokers and municipal bonds. Major cryptocurrency exchange and investment companies have formed a new trade association to advocate on their behalf in Washington.

And, most important, firms want the Securities and Exchange Commission to approve an investment fund in Bitcoin that would be able to issue shares on a stock exchange. Such a designation would clear the path for billions in investment from Wall Street.

SEC Commissioner Hester Peirce told the Washington Examiner that cryptocurrencies could succeed both in the form of a regulated product and as a disruptive innovation. “I think there’s room for both pieces of that community,” she said.

Peirce, one of the commission’s three Republicans, earned adulation and the nickname “CryptoMom” from the cryptocurrency community in August when she dissented to the commission staff’s rejection of a Bitcoin exchange-traded fund.

The SEC has cited several reasons for rejecting Bitcoin ETFs, including the fear that prices could be manipulated, that much of the market infrastructure for cryptocurrencies has yet to be built, and that it’s an entirely new type of asset. Just like everyone else, the SEC has struggled to understand what the cryptocurrencies can and can’t do.

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