Have you ever had to pay a currency conversion fee? Have you ever wondered why every country still has their own currency when most transactions are digital? Crypto could be the currency of the world, but regulations are stopping this from happening.
Crypto currencies are a form of digital currency. These currencies rely on other people, using the system, not a centralized banker using “blockchain technology which enables transition from the centralised to the so-called peer to-peer (P2P) model”. This concept of the blockchain is what cryptocurrencies rely on, but to fully understand we need to know what cryptocurrencies are. As a professor of Niš University, Dimovski writes, “The term cryptocurrency refers to digital or virtual currency that is protected by cryptography, which makes it almost impossible to counterfeit or double-spend”. The blockchain is what performs the cryptography for crypto currencies to work. So with this open currency, why has it not been adopted as the world currency like the EU has done with the Euro? This comes down to the regulation, governments around the world treat crypto currencies as a property, not a currency. Picture trying to buy a digital service or product with a portion of your house, “IRS guidance surrounding the transfer is a major source of confusion because of the uncertainty in determining whether the unit of virtual currency is treated as prize income, earned income or even capital asset”. What will happen to taxes on every transaction? Will banks approve a shift to crypto currency? The dollar is not backed by gold anymore, so should crypto?
The legislature is not easy to understand, and it differs around the world, but around the world the rules seem to treat it as property. According to the IRS, “A digital asset that has an equivalent value in real currency, or acts as a substitute for real currency, is referred to as convertible virtual currency, for example, a cryptocurrency. It can be: Used to pay for goods and services, Digitally traded Exchanged for or converted into currencies or other digital assets”. This effectively treats crypto as an asset because it qualifies as a digital asset, this means you don’t have to pay for conversion fees, but picture trying to buy something with a piece of your house; you may not need to convert from one fiat currency to another, but at the end of the year you get taxed on the value of the portion of the house. This can get tricky when you get crypto, but when the value of crypto goes up, you get taxed on the new, inflated value at the end of the year.
In 2024, 315 million people used Amazon That is approximately 93% of the current US population. This proves that online shopping is at an all time high, not all shoppers are on Amazon nor are all shoppers based in the United States, However 30 years ago no one was shopping online yet. Some of these other online shopping websites have seen the benefit to accepting crypto “Even large online retailers like Overstock.com have begun to accept cryptocurrency as a form of payment, which many regard as a significant step towards establishing Bitcoin as a universally accepted virtual currency” With a shift toward online shopping, we have also seen a shift in the labor market “labour markets are thought to be in the midst of a dramatic transformation, where standard employment is increasingly supplemented or substituted by temporary work mediated by online platforms.” While exact statistics are hard to locate, the shift to remote work has definitely brought in some international workers who are working across all borders of the world. Many of these people could benefit from a decentralized currency, not having to pay conversion fees to banks, and not having to worry about what the current exchange rate is for whatever currency. However with the current set of regulations businesses are unlikely to want to pay an employee with some digital assets.
Due to the decentralized nature of crypto currency, there is no real need for a bank to hold all of your money, however as with most currency systems, people will need to take out loans. Banks could act as wallet holders, keeping the private keys for your wallet. This could be set up in a similar fashion as your current online banking portal. At this time, banks could be using your money to invest in cryptocurrencies; as the FDIC clarified in 2025, “This FIL affirms that FDIC-supervised institutions may engage in permissible activities, including activities involving new and emerging technologies such as crypto-assets and digital assets, provided that they adequately manage the associated risks”. This means that banks can already be investing in crypto just like they do with the stock market. They could continue investing the deposited users' money as they need. With cryptocurrency, wallets can be created by any user/company for any purpose. This new wallet creation idea would make it easier to launder money, the concept of a global crypto currency seems ideal, but maybe the current way wouldn't work at a large scale.
Crypto has no gold backing. Crypto does not need a gold backing, there is only a certain amount of crypto that can ever exist; unlike with gold. The U.S. Dollar is also no longer attached to the gold standard, as Maria Hasenstab wrote about,
“There are significant problems with tying currency to the gold supply:
Crypto currencies limit the amount of total currency that can be created when they are first made. Due to the maximum, each coin would get rarer as time goes on; this means that inflation would work backwards, the value of each coin would slowly go up over time.
Keeping the same decentralized nature is a must; one government cannot have any more control over the currency system than another government; governments still need to collect revenue, they wouldn’t be able to print money anymore. Tax forms would be filled out by your employing company, and turned into the IRS (Or any tax bureau). Sales tax would be paid by companies who you purchased something from, this could be tracked by looking at a wallet that handles all transactions for when people purchase an item form that company; in conjunction with the company filling out some kind of tax form stating how much money they sold in any given item. Excise and property tax would function the way that currently do, your local government would send a bill for a portion of whatever your house/car/property is valued at. Tariffs would still be paid by the companies involved, by registering a company in a region, and allowing the government to see where you sent your funds. Keeping the blockchain public is necessary to have some kind of reputation for every wallet, people associated with fraud would have a shorter reputation as they would want to hide the wallets they are stealing money with, standard business wallets would have a longer reputation as they conduct business far more regularly than a single person does. Allowing any user to randomly create a wallet with no identifying information could potentially just cause a rise in fraud/crime. When born, a person could be assigned a “master key”; this would be a combination of biometric data, birth data and an issuing authorities data. This master key could then be used to create “child wallets”; these wallets could be traced back to the person who has the master key.