Cryptocurrencies: The Impossible Domestic Law Regime?

innovative and sophisticated business solutions. 4 Last but not least, the entire market is characterized by extreme volatility where a single coinand to some extent the entire market cap-could jump up or down by 10% or more in a single day. 5 Although much of the promise of DLT remains to be demonstrated in practice, and the technology is currently struggling with scaling up, 6 what ensures that Blockchain and DLT will not become bubbles that are bound to burst and be forgotten is the sustained investment into actual business solutions via the development of smart contract applications running on a Blockchain.In 2021, this sustained investment exceeded USD 1 billion in every single month.As the technology celebrates its thirteenth birthday in 2022, we may safely say that the investors who continue to pour ever more money into the development of actual business models and solutions-"use cases" for cryptocurrencies-have a pretty good understanding what the technology can and cannot achieve and what they are buying with all this money. 7 What is far less clear, however, is the guidance provided by the regulators in different jurisdictions.The inventors of digital money were partly motivated by a rejection of traditional government control over money and money supply.When Satoshi Nakamoto published his famous white paper in 2009, 8 the world was trying to climb out of the 2007/08 financial crisis, and the U.S. federal government had just bailed out the financial sector with over USD 1 trillion in funds that were essentially newly printed money, diluting the existing money supply and, therefore, the value of assets and savings in the hands of corporations and private citizens.Traditional fiat currencies are controlled by central banks who are overseen, whether they are nominally independent or not, by governments and legislators, and subject to political pressures and exigencies.Cryptocurrencies, by contrast, are either controlled by predetermined mathematical algorithms (for example, the cap on total supply of Bitcoin,