The Essential Principles for an Active Securities Regulation of Cryptocurrency

Abstract

Securities regulators in the world do not actively regulate cryptocurrency yet. For an effective, active securities regulation, I introduce four novel propositions for the regulators. First, the cryptocurrency technology and its peer-to-peer network are meaningless without the activities of the involved people. Second, the private key of cryptocurrency should be utilized as an identification tool. Third, the active regulation should include a mandatory reporting provision of cryptocurrency transactions and balance. Fourth, the transaction size and ledger length of cryptocurrency should be used as regulatory risk measures. My propositions are founded on a combined analysis of law, finance, math, and technology. Then, I discuss a possible unification of currencies across the globe, with the potential to establish an international cryptocurrency authority.