In a Wall Street Journal oped titled, Why Warren and Sanders Object to Crypto Rule, by Brian P. Brooks and Charles W. Calomiris, the authors, make a compelling argument for bringing the cryptocurrency sector into the supervised national banking system. Interestingly, while taking a jab at how risky the already regulated, supervised national banking system is. They theorize that the objection of staunch regulators like Senators Bernie Sanders and Elizabeth Warren to doing so is:

Here’s our theory: Crypto developers are trying to build a financial system where users have more control. In that system, credit is allocated by algorithms rather than loan officers, payments are settled instantly on blockchains rather than slowly inside the Federal Reserve, and customer funds are secured by cryptographic keys rather than by hackable debit-card PINs. A user-controlled financial system threatens the vision of a government-controlled system for which Sens. Warren and Sanders continue to advocate.

Why Warren and Sanders Object to Crypto Rules – WSJ: https://on.wsj.com/3CKD3uX

The authors go on to say that they agree with the current administration’s opinions on cryptocurrencies. And that the purpose of having a regulatory system is to “take risky financial activities for which there is high customer demand, and make them less risky.”

So, on the one hand, the system is not beyond risk, and regulations don’t eliminate, or for that matter, reduce risk — see 2008. And on the other hand, the system is there to help make these sectors “less risky.”

I read this as advocates for cryptocurrencies looking for legitimacy from the government. A legitimacy that would open the floodgates for major, “too big to fail” institutions to go wild with speculation and productizing for customers while hiding behind the safety net of the federal reserve.

For all the virtues and promises of decentralization, the cryptocurrency sector remains controlled by a very few. A few who will benefit immensely from the legitimacy regulation would lend it. The same few will have the funds and influence to use said regulation to lock out any potential newcomers or disruptors.

Perhaps banks and the federal reserve, in particular, may be taken out of the central role or, at a minimum, set to the sidelines. But all that data will need to run over something; those who control the network will control the economy.