Hello, Blockchain! Welcome to Wall Street

People with Fidelity 401k or retirement accounts might have noticed a new addition to their home screens: listed among the daily commodity prices is the price of bitcoin. Looks like Fidelity is now poised to allow bitcoin trading in some 34 million individual investor accounts. 

Meanwhile, the Bloomberg Crypto Outlook Report points out that bitcoin can’t be printed, and with a finite supply, it’s likely to grow in value over the years ahead. One of Bloomberg’s senior strategists has spoken of bitcoin’s potential when the economy improves.

What About Regulation?

We’re watching a sort of bifurcation: (a) bitcoin; (b) most other cryptocurrencies. To break it down:

(a)  The U.S. Securities and Exchange Commission regards bitcoin as a store of value, SEC chair Gary Gensler says. Gensler singled out bitcoin as “the first crypto token” and observed that it trades like digital gold. Many in the bitcoin community say bitcoin acts like a commodity, not a security — and yes, that difference is being accepted by the U.S. regulatory world.

(b) In contrast, the SEC looks at most cryptocurrencies as securities. Most cryptocurrency businesses have founding groups that lead them, and people make passive income off the trades. Therefore, Gensler has said, most cryptocurrency businesses, and those who deal with them, should register with the SEC. Crypto exchanges, custodians, brokers, and lenders will then have to adhere to federal disclosure rules — just like a public company that issues shares would.

It’s interesting to see clarity coming from the SEC. The forthcoming oversight of cryptocurrencies is likely to make these innovations feel safer for the average person.

Bitcoin’s Basis, Blockchain, May Be Key to Upholding Property Rights

Many countries lack systems to accurately trace land rights. Globally, the lost opportunities for landowners without titles add up to trillions of dollars.

Governments — at least those that have the people’s trust — could adopt blockchain-based land registry systems to address this worldwide problem. Blockchain, a technology brought to the world by bitcoin, is a tamper-resistant database. It becomes the single, indelible source of information about everything that impacts a chain of title. Activities are verified through a global computer network, so the information is constantly accessible.

Already, some progress is evident:

  • Only about a fifth of landowners in Ghana have titles. What does this mean? Arguments. Legal tangles. Poverty. Now, a nonprofit called Bitland records parcels on the blockchain — providing property titles and satellite-enabled survey information for land in Ghana.  
  • There are land grabbers in Brazil who create fake deeds, clear swathes of rainforest, and register as legal owners on account of having “improved” the land they illicitly took. A U.S.-Brazilian collaboration is now setting up a blockchain deed recording system, hoping to stop the abuses.

Some areas of the United States have severe land title issues, too.

Help for the Heirship Property Holders?

Their homes are passed from generation to generation, without documents. Without a formal title, the holder of an heirship property cannot get insurance for the property, or claim any applicable government disaster funds. (This is so even if they’ve paid taxes on the parcels.) Nor can they get loans on their properties, or sell them for fair market value. These residents are vulnerable to corporate investors, and often find themselves unable to defend their property against claims, judgments, or boundary disputes.

Heirship property is common throughout the southern United States. Most heirship property holders are African-American, Mexican-American, Native American, and rural Appalachians.

Not entitled? Here’s how “heirship property” holders are locked out of essential government relief packages.

For these landowners, documentation would mean a financial turnaround. But starting the digital chain is simpler than untangling missing titles from the past. So the story is complicated, and it’s just getting started.  

Supporting References

Shawn Amick for BitcoinMagazine.com: Bloomberg Analyst – Bitcoin Is a Wild Card Set to Outperform (Sep. 8, 2022).

Nelson Wang for CoinDesk.com: Fidelity Considering Offering Crypto Trading to Brokerage Customers – Report (Sep. 12, 2022).

Luc Olinga for TheStreet.com: SEC Delivers Tough Love to Crypto (Sep. 9, 2022).

Nir Kshetri for The Conversation: Blockchain-Based Property Registries May Help Lift Poor People Out of Poverty (Jun. 28, 2018).

And as linked.

Photo credit: David McBee, via Pexels.