The discussion surrounding bitcoin and other cryptoassets has been a contentious topic in the United States. While the private sector has embraced these digital currencies, with even traditional institutions like Blackrock and J.P. Morgan investing in them, policymakers have been resistant. Despite the success and growth of bitcoin, the SEC continues to classify cryptoassets as securities and politicians like Elizabeth Warren remain staunchly against them.
However, this resistance is counterproductive and goes against the current trend of digital transactions. The use of cash is decreasing and the dollar has already gone digital, with only a small percentage of transactions still being conducted with physical currency. This shift towards digitization is not limited to currency, as traditional financial assets are also being tokenized. Embracing these trends and incorporating them into the U.S. financial system would be beneficial for both consumers and companies.
Money itself is becoming less of a physical currency and more of a technology. As the world becomes increasingly digitized, money will continue to evolve and adapt alongside it. This is evident in the growing use of digital and virtual transactions in industries like e-gaming and streaming. The U.S. has always been a leader in technological innovation and ignoring the evolution of money would be a disservice to the country.
The U.S. dollar’s status as the global reserve currency is not guaranteed and should not be taken for granted. Historically, multiple nations and empires have held this position and the U.S. is just one in a long line. As other countries continue to challenge the U.S. and the digitalization of the dollar increases, it is important for policymakers to proactively invest in the future of money. Instead of resisting, they should follow the example of the private sector and embrace bitcoin and other cryptoassets.
Follow me on Twitter or LinkedIn and check out my other work. As a professor at the City University of New York, I am also involved in various organizations related to emerging technologies and sit on the advisory board of Gilded, a startup accelerator participant.
