Franklin Knoll, an academic and monetary historian, asserted that cryptography can be both security and currency. Referring to the history of American money, Knoll argues that being currency and security at the same time, these are really not mutually exclusive.
Notorious Continental Dollar Coins
Franklin Knoll, a US-based monetary historian, has emphasized that the history of the US dollar over the years shows that being a currency and security are not mutually exclusive and that crypto can be both.
The assertions by Noll, the head of Noll Historical Consulting, come at a time when the debate over the state of cryptocurrency continues to be contentious and unresolved. For example, Bitcoin.com News recently reported comments from current US Securities and Exchange Commission Chairman Gary Gensler on the matter.
However, in a short article published on his blog recently, Noll began using the example of Continental Dollar coins to support his assertions. According to the historian, these now “infamous” coins were an attempt to “finance the American Revolutionary War through money printing” which ultimately failed.
In addition to serving as currency to finance war, Continental dollar coins were intended to serve as securities. Noll explains:
Like the Farley Group [a professor in economics and history] He noted that the Continents were essentially zero-coupon bonds issued in small denominations. However, the plan collapsed when Congress changed the original payment terms, rendering the bonds worthless.
Besides the continental dollar, Knoll also refers to the creation of interest-bearing bonds which were actually “a collection of Civil War-era paper money emissions for the United States Treasury”.
According to Noll, these banknotes were intended “to serve as currency and security.” However, unlike the continental dollar coins that ultimately failed, the interest-bearing banknotes were successful.
“The interest bearing bond was created to serve as currency and as a security. Issued in denominations as low as $10, interest was paid 5%. This interest will be paid when the bond matures and transferred to the Treasury. These notes have been successful and have been repaid as promised. U.S. Treasury Department,” Knoll explains.
Meanwhile, when asked how long it will take for regulators, in particular, to come up with the idea that crypto can be both security and currency, Noll told Bitcoin.com News that this could take some time. He argues that “regulatory agencies don’t think that way.” For them, the thing is either a security that must be monitored by the Securities and Exchange Commission or it is a form of money that must be monitored by the US Treasury or some other agency.
“I think it will take some time for regulators to move to a new paradigm (or really, back to an old paradigm we haven’t seen in a century) where the payment methods classes are different or combined. “I think we’ve been talking for at least 5 years,” he concluded.
Do you agree with Noll’s argument that cryptography can be both security and currency? Tell us what you think in the comments section below.
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