Franklin Noll, an academic and monetary historian, asserted that crypto can be both a security and a currency. Citing the history of American currency, Noll argues that being both a currency and a security is, in fact, not contradictory.
The “infamous” continental dollar coins
Franklin Noll, a US-based monetary historian, asserted that the history of the US dollar over the years shows that being a currency and a security is not contradictory and that crypto can be both.
The claims by Noll, the president of Noll Historical Consulting, come as the debate over the status of cryptocurrencies continues to be contentious and unresolved. For example, Bitcoin.com News recently reported current US SEC Chairman Gary Gensler’s comments on the subject.
Yet, in a short post recently published on his blog, Noll begins by using the example of continental dollar coins to support his claims. According to the historian, these now “infamous” coins were an attempt “to fund the American Revolutionary War by printing money” that ultimately failed.
In addition to functioning as a currency to finance the war, continental dollar coins were intended to serve as securities. Noll explains:
Like Farley Grubb [a professor in economics and history] pointed out, Continentals were essentially zero-coupon bonds issued in small denominations. However, the plan fell apart when Congress changed the original redemption terms, rendering the tickets worthless.
In addition to the Continental dollar, Noll also points to the creation of interest-bearing notes which were effectively “a grouping of issues related to Civil War-era paper money from the U.S. Treasury.”
According to Noll, these notes were intended “to serve as both currency and security.” However, unlike the continental dollar coins which ultimately failed, the interest-bearing notes succeeded.
“The interest-bearing note was created to serve as both currency and security. Issued in denominations as low as $10, the notes paid 5% interest. This interest would be paid when the note matured and would be returned to the Treasury. These tickets were a success and were paid for as promised by the US Treasury,” says Noll.
The new paradigm
Meanwhile, when asked how long it would take regulators, in particular, to come to the idea that crypto can be both a security and a currency, Noll told Bitcoin.com News that will probably take some time. He argues that “regulatory agencies don’t think that way.” To them, something is either a security that should be monitored by the SEC or a form of currency that should be monitored by the US Treasury or some other agency.
“I think it will take time for regulators to move to a new paradigm (or really, back to an old one that hasn’t been seen in a century) where categories of payment methods are different or merged. I think that we are talking about at least 5 years,” he concluded.
Do you agree with Noll’s argument that crypto can be both a security and a currency? Let us know what you think in the comments section below.
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