Cryptocurrency has been in the news a lot lately. The cryptocurrency market has been on a rollercoaster for two years, but has mostly been crashing since January, according to The Guardian. Three Arrows Capital, a crypto hedge fund, went bankrupt and the fund’s founders are missing, according to a court filing made last week. This week, the Vermont Department of Financial Regulation issued a warning that cryptocurrency lender Celsius was “deeply insolvent.”
I keep a dictionary on my desk, the 1966 Random House Dictionary of the English Language. It defines “crypto-” as “a learned borrowing from Greek meaning ‘hidden,’ ‘secret,’ used in the formation of compound words: cryptograph.” Excuse me for thinking that the dangers inherent in combining “hidden” and “secret” with “currency” should be self-evident.
The whole idea of currency is that it is public and reliable, making possible exchanges across a range of persons, situations, interests, ideologies and cultures. Technology can only go so far in compensating for this flaw: Crypto is designed to be nongovernmental and, just so, invites all the pathologies of early 21st-century capitalism.
The book Neighbors & Strangers: Law and Community in Early Connecticut by Bruce Mann brilliantly examines the ways contract and debt law evolved in colonial Connecticut from the mid-17th century until the mid-16th century, and it largely focuses on the ways the legal system developed public, accountable, non-private, not secret means of enforcing contracts as trade expanded from exchanges between neighbors to a worldwide system of exchange. (I know, I know — what could be more boring than a book about the development of credit law in colonial Connecticut, but the book is really, really fascinating!) The same dynamics that applied to those legal developments then apply today.
So, when “cryptocurrency” first became a thing a few years ago, my Connecticut ideological roots said, “Don’t even think about it.” They do not call our state “the land of steady habits” for nothing!
What is more, it quickly became obvious that the champions of cryptocurrency espoused the kinds of libertarian views I had long viewed as anathema to Catholic social doctrine. Ian Bogost, writing in the Atlantic in 2017, observed:
Bitcoin is an expression of extreme technological libertarianism. This school of thought goes by many names: anarcho-capitalism (or ancap for short), libertarian anarchy, market anarchism. Central to the philosophy is a distrust of states in favor of individuals. Its adherents believe society best facilitates individual will in a free-market economy driven by individual property owners — not governments or corporations — engaging in free trade of that private property.
So, the proponents of cryptocurrency were those who, having experienced the economic meltdown of 2008, which even Alan Greenspan said was due largely to the market’s inability to self-regulate, concluded that the problem was too much regulation.
Currency has long been understood as an attribute of sovereignty. One of the earliest debates in our young republic had to do with the issuance of currency, and whether that power resided with the individual states or with the federal government. Article I, Section 8, Clause 5 of the Constitution awarded the power to the federal government. “The Congress shall have the power … To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.”
Libertarians deny the sovereignty of the state and insist on the sovereignty of the individual. What could go wrong?
A truly pernicious bill, with bipartisan support, proposes to regulate cryptocurrency but also pretends it …….