Understanding National Governments’ Desire To Regulate Crypto Currencies Through Pre-Westphalian Concepts Of Sovereignty

Abstract

Crypto currencies, electronic currencies and block chain financial technologies (Fintech), have been debated issues whereby national governments are trying to put certain regulation upon them, especially citing security concerns. Crypto currencies can be used for money laundering, untraceable transactions of criminal and terrorist organizations and thus constitute genuine security risks. To many evangelists of these new technologies, governmental desires to impose regulations is viewed negatively. However, although usage of these technologies will likely continue to expand in the global economy, there is a desire to put them under regulation by most of the major nation states. It is necessary to understand the essence of currency as a tool of national sovereignty long before the age of the Westphalian concept of the modern state system. The desire to regulate Fintech derives from a concept of sovereign power that goes back to biblical times and far beyond the Westphalian notion of the sovereign and independent modern nation state. That notion of sovereignty rests on the power to mint money. Furthermore, the concept of such a sovereign power is observed in Ancient Rome, Medieval Europe as well as the early Islamic understanding of sovereign power. Thus it is essential to understand globally how the symbol of money has been a sovereignty symbol before starting any discussions on national or international levels of regulations.