Academic and monetary historian Franklin Noll claimed crypto could be both a currency and security. Citing the history of US money, Noll asserted the two are not mutually exclusive.
The “infamous” Continental dollar coin:
According to economist Franklin Noll, a UC-based monetary historian, the history of the US dollar over the past few centuries is an example of how being a currency and security can go hand-in-hand.
The statements by Noll, the president of Noll Historical Consulting, came when the debate over cryptocurrencies remained a contentious one. Despite this, Noll used the example of the continental dollar coins to illustrate his point in a recent blog post.
In the opinion of the historian, these now “infamous” coins were a failed attempt by the government to print money in order to fund the American Revolutionary War. Besides serving to fund the war, the continental dollar coins were also intended to serve as securities.
Noll said that Farley Grubb [an economist and historian] has pointed out that Continentals were zero-coupon bonds issued in small denominations. But when Congress changed the original repayment terms, the notes lost their value.
Along with the continental dollar, Noll also highlights the creation of interest-bearing notes, which were true “a grouping of paper money-related emissions of the US Treasury during the Civil War.”
The notes were intended to serve as currency and a form of security, but they were more successful than continental dollar coins, which ultimately failed. Interest was paid on the interest-bearing notes when the notes matured and were paid into the Treasury. The notes were issued in denominations as low as $10, and they paid 5% interest. Noll said that the notes proved to be successful and were paid off as promised by the Treasury Department.
The new paradigm:
When asked how long it will take for regulators, in particular, to come around to the idea that crypto can be both a security and a currency, Noll told Bitcoin.com News that it would probably take some time.
In his view, regulatory agencies do not think this way. To them, something is either security that must be regulated by the SEC or money that must be regulated by the US Treasury or some other agency.
He believes it would take a number of years for regulators to adopt a new paradigm (or actually return to one that hasn’t been seen for a century) where payment methods are categorized differently or merged. “I think we are talking about at least five years,” he said.
