Chart of the Day: Who Owns Cryptocurrency?

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Latin America leads in cryptocurrency ownership, with 30% of adults there holding the digital assets. Within the region, ownership jumps as high as 45% in Argentina. In second place is Asia-Pacific, where 24% of adults are crypto owners, while the US and Canada come in third, with 19% investing in these digital currencies. Learn more here.

Who Owns Cryptocurrency

Often the topic of the legality of cryptocurrency comes up. In the US Constitution, the coinage of money is specifically mentioned in the coinage clause.

Article I, Section 8, Clause 5: The Congress shall have Power To…coin Money, regulate the Value thereof, and of foreign Coin …

Congress’s power to coin money is exclusive. Article I, Section 10, Clause 1 (State Coinage) does not allow the states to “coin Money; emit Bills of Credit; [or] make any Thing but gold and silver Coin a Tender in Payment of Debts …” Whereas the prohibitions on the states are clear and detailed, Congress’s grant of power under the Coinage Clause is open-ended.

Nonetheless, certain elements are clear. First, this clause grants Congress the authority to “coin money” from precious metals such as gold and silver. Under the Articles of Confederation, the power to coin money was a concurrent power of Congress and the states. To create a more standardized monetary system and reduce the costs of running mints, the Constitution granted this power to Congress exclusively. The elimination of the states’ power to coin money and the exclusive grant to Congress provoked controversy because the power to coin money was traditionally understood as a symbol of political sovereignty. Learn more here.

The legal status of bitcoin (and related crypto instruments) varies substantially from country to country and is still undefined or changing in many of them. Whereas the majority of countries do not make the usage of bitcoin itself illegal, its status as money (or a commodity) varies, with differing regulatory implications. Learn more here and see the summary chart below.

Legal Status of Bitcoin

It is clear from the charts above, that the areas where the most cryptocurrency is owned, though not totally known, are havens for illicit activity and often cryptocurrency is used to avoid taxes and foster the illicit drug trade. It is also used to get around currency export controls of various countries.

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The cryptocurrency market is one of the largest unregulated markets in the world, with about 2,000 different currencies worth about $250 billion and a daily turnover of $60 billion – as known in 2019. Learn more here. The best-known digital currency, Bitcoin (BTC), is also the most popular with a higher market value than all other digital currencies combined.

In total, approximately 6 million users were classified as being involved in illegal activities, who account for 5.9% of all users, however, their activity is much more significant and constitutes about 30% of the Bitcoin transactions. The full extent of illegal activity is estimated at about $ 76 billion a year, similar to the $100 billion illicit drug trade in the United States.

It is a hotly debated subject whether governments will eventually either allow cryptocurrency or ban its use. Cryptocurrency technology is quite compelling on many levels. Many believe today, governments allow the current cryptocurrency environment to enable the technology development to eventually develop their own government-sponsored cryptocurrency in the future. Yes, Fedcoin is coming – learn more here.

Governments need to maintain monetary sovereignty in order to be able to print money to buy votes for the many government’s expanding role in our lives. Will politicians in the end give up this power? You know the answer to this. Governments can never stop the private cryptocurrency trade but they can retard it greatly for the average citizen.

Very likely at some point private cryptocurrency will give way for a government-backed cryptocurrency. Private cryptocurrency value may become worth zero, though the wild speculative bubble can make many millionaires in the meantime. A survey suggests 4% of US workers quit their jobs in the past year after successfully investing in crypto markets.

On the other hand, even all government fiat currencies will eventually go to zero as well. Gold?

See more #chartoftheday posts.

 RWR original article syndication source.


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