Abstract

The possibility of cryptocurrencies dominating the financial markets in the United States in the proximate future is high and achievable with comprehensive regulations by the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Financial Crimes Enforcement Network (FinCEN), Internal Revenue Service (IRS), and Office of the Comptroller of the Currency (OCC) and substantial compliance with the regulations by the cryptocurrency companies, stakeholders, exchanges, investors, traders, consumers, and all participants in cryptocurrency transactions in the United States. Admittedly, the number of companies and organizations accepting cryptocurrencies as payment options in the United States is gradually growing. However, cryptocurrencies are not generally and widely accepted as payment options in the United States due to so many reasons, one of which is lack of extensive regulations addressing different aspects of the cryptocurrency ecosystem and non-compliance with the existing regulations by the developers, issuers of cryptocurrencies and tokens, payment processors, wallet providers, firms, legal and compliance consultants, investors, traders, and customers/users, etc. Holistic regulations of cryptocurrencies in the United States by the regulatory bodies and extensive compliance thereof will propel cryptocurrencies into the mainstream financial circuit where cryptocurrencies just like U.S. dollars will be generally accepted as a legal tender. The potential for cryptocurrency to gain legal tender status in the United States is contingent upon the development of solid regulations and strict compliance, which would, in turn, secure the endorsement of the U.S. Government. This article will briefly explain the introduction of cryptocurrency. Trace the genesis of cryptocurrency, perceptions of cryptocurrency in the United States, discuss striking a balance between regulation and innovation, examine the roles of the U.S. regulatory bodies in cryptocurrency ecosystem. Discuss how extensive and well-defined regulatory environments and substantial compliance with regulations will facilitate the widespread acceptance and integration of cryptocurrencies into the regular financial system in the United States.

Keywords: Regulations, Compliance, SEC, CFTC, Cryptocurrencies, United States, Financial circuit