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Cryptocurrency laws and regulations

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Cryptocurrency laws and regulations

Overview of regulations, how they’re regulated, key challenges, and more resources for legal professionals

Legal terms · Securities law · Cryptocurrency laws

The expansion of virtual currencies like Bitcoin and Ethereum has put U.S. regulators in a dilemma between encouraging innovation and safeguarding investors.

The evolution of cryptocurrency is primarily due to the rise in technology worldwide. It has pushed financial boundaries, leaving with the possibility that cryptocurrencies may become the central element of the global economy.

The significance and impact of the use of cryptocurrency in the U.S. highlights the need to regulate it. However, there is a challenge in establishing a clear policy framework. With the digital revolution taking place through cryptocurrency, the state and federal governments are trying to determine how to define their role in regulating this new asset class in the best way possible.

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What is cryptocurrency?


What is cryptocurrency regulation?


How is cryptocurrency regulated?


State regulations

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International Standard-Setting Bodies


Challenges in the US crypto regulation

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What is cryptocurrency?

Cryptocurrency is a type of digital money that is a decentralized digital asset designed as a medium of exchange, utilizing cryptographic protocols to regulate the creation of new units. It exists only online and is not controlled by any government, central bank, or authority.

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A digital or virtual currency that is not issued by any central authority, is designed to function as a medium of exchange, and uses encryption technology to regulate the generation of units of currency, to verify fund transfers, and to prevent counterfeiting.

Black’s Law Dictionary

(12th ed. 2024)

Cryptocurrency uses a secure technology called cryptography to keep transactions safe and verify fund transfers to prevent fraud. It operates on a decentralized system and transactions are recorded on a public ledger called blockchain. The regulatory treatment of cryptocurrency varies across jurisdictions, with legal considerations encompassing anti-money laundering compliance, securities laws, taxation, and consumer protection frameworks.

What is cryptocurrency regulation?

Crypto regulations are the legal rules and guidelines that are present and issued by governments to shape how digital assets such as virtual currency operate. These laws have varied approaches across nations.

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In the U.S., there are various states wherein some are friendly towards market participants embracing crypto with clear regulations, while others ban it outright.

Around 60 percent of U.S. citizens lack confidence in cryptocurrency trading or investment, considering the existing systems to be unreliable or unsafe. One primary reason for this distrust may be the absence of a single, consistent set of laws to regulate cryptocurrencies.

The existing regulations range from covering everything about how cryptocurrencies are to be created and traded to how they interact with traditional financial systems. Well-defined rules can help the crypto market in the following ways:

  • Help in protecting investors from scams and market manipulation
  • Ensure that there is transparency in the transaction, along with accurate information
  • Help prevent illegal activities like money laundering, fraud, misleading information, etc
  • Clarify the tax rules that apply to digital currencies
  • Encourages market participation and confidence in the investors while encouraging blockchain innovation
  • Regulates the risks that are or may be associated with the transactions

How is cryptocurrency regulated?

No defined regulation is used to regulate cryptocurrency in the U.S. as of 2025.

However, a major crypto legislation was introduced in 2024, i.e. the Financial Innovation and Technology for the 21st Century Act (or FIT21), that has been passed by the U.S. House of Representatives but has not yet been enforced. The legislation is aimed at emphasizing the role of the Commodity Futures Trading Commission (CFTC) as a lead crypto regulator in the U.S.

In the absence of one framework for cryptocurrency, the authorities try to regulate and enforce the already existing laws both at the federal and state levels, which are as follows.

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Federal regulations

At the Federal level, regulations have predominantly dealt with various administrative agencies and bureaus.

The Securities and Exchange Commission (SEC)

The SEC primarily deals with securities such as convertible notes, stocks, debentures, etc. They aim to protect investors through mandatory registration of the securities that qualify for it.

The SEC brought lawsuits against major platforms such as Coinbase, Binance, Kraken, etc, for violation of regulations.

Due to the difference between the cryptocurrency and securities, a judicial split emerged in 2023, with Southern District of New York (SDNY) Judge Torres ruling in SEC v. Ripple Labs that only the institutional sales of XRP were securities, while Judge Rakoff in SEC v. Terraform Labs held that Terraform’s UST stablecoin was a security.

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Courts remain divided on this issue at the time of this writing.

Commodity Futures Trading Commission (CFTC)

CFTC is a federal agency that is tasked with regulating U.S. commodities and derivative markets.

The CFTC regulates cryptocurrencies as commodities under the Commodity Exchange Act and has developed jurisdiction in derivative markets, all of which are set forth in decisions such as CFTC v. McDonnell (2018) and CFTC v. My Big Coin Pay (2018), etc.

In 2017, the CFTC introduced a self-certification process for bitcoin futures which allowed exchanges to launch crypto derivatives. For enforcement measures, the CFTC has engaged in high-profile enforcement matters against Uniswap, Binance, Celsius, Ooki DAO, and secured an order against defaulted FTX to pay a penalty of $12.7 billion.

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Internal Revenue Service (IRS)

Since 2014, the IRS has treated cryptocurrency as a digital representation of value which is different from a representation of the U.S. dollar or any other real currency. It functions as a unit of account, a store of value, and a medium of exchange.​

Being categorized as property makes each sale, trade, or buying of cryptocurrency taxable under capital gains taxes like stocks or property. Regardless of whether one incurs profit or loss, correct reporting of the same must be done according to the IRS.

US Department of the Treasury’s Financial Crimes Enforcement Unit (FinCEN)

FinCEN was the first U.S. federal regulator to address cryptocurrency, by issuing guidance back in 2013.

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It governs virtual currency businesses and wallet services as Money Services Businesses and mandates them to have anti-money laundering and counter-terrorism financing regulations, specifically on Money Services Businesses dealing with Convertible Virtual Currency.

US Department of the Treasury’s Office of Foreign Assets Control (OFAC)

OFAC is a regulatory agency that administers and enforces U.S. economic and trade sanctions to maintain national security and foreign policy interests.

These sanctions target countries, terrorists, narcotics traffickers, and other threats including those involved in cryptocurrency activities. OFAC applies the same sanctions compliance standards to transactions involving digital assets as it does to those involving traditional currency.

U.S. Department of Justice (DOJ)

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In October 2021, the DOJ created the National Cryptocurrency Enforcement Team (NCET) to enhance its investigative resources to control criminal activity in the crypto environment.

The DOJ has been involved in several high-profile cases and has even charged the crypto market with insider trading, including against former Coinbase exchange employees.

Federal Deposit Insurance Company (FDIC)

After issuing joint prudential crypto releases in November 2021, the FDIC instructed all FDIC-supervised institutions in April 2022 to notify if they were conducting crypto business or intended to engage in it. This was required so the FDIC could review the information provided.

Federal Reserve Board (FRB)

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FRB supervises the banking institutions and banking activities.

It issued reports on stablecoins and central bank digital currency in January 2022. After that jointly in 2023, with FDIC and OCC, the FRB released two statements on the risks that are associated with crypto assets and the participants.

The FRB also issued supervisory guidance requiring banks under its oversight to notify their lead supervisory contact before engaging in crypto-asset activities.

State regulations

Financial regulators for cryptocurrency at the state level are as follows:

New York State Department of Financial Services (NYDFS)

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In contrast to other crypto regulations that have been prominently adopted by other states, New York has a different regime that is focused on customer protection.

It was the first comprehensive crypto regulatory regime among major U.S. states which led the way by introducing the concept of BitLicensees — used to self-certify the listing or adoption of new virtual currencies. However, it is generally considered to be prohibitive and burdensome by the market participants.

California Department of Financial Protection and Innovation (DFPI)

On one hand, the DFPI has shown a friendly approach to the crypto market participants providing a narrow reading of state licensing requirements. On the other hand, it has implemented a comprehensive state crypto regulatory framework.

State attorneys general, including the New York State Attorney General (NYAG)

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NYAG is one of the crypto regulators in the U.S. that has actively participated in filing charges and settling with the crypto platforms and market participants of all sizes.

International Standard-Setting Bodies

There is a constant rise in the involvement of digital currency transactions around the world, which often lightens the line between the borders as well.

Now, given the evolving complexities of digital asset markets, several prominent international financial standard-setting bodies have undertaken initiatives to regulate cryptocurrencies and make sure that they are regulated across jurisdictions.

Bank for International Settlements (BIS)

BIS acts as the central bank, and therefore it plays a role in shaping the regulatory framework for Central Bank Digital Currencies and stablecoins. BIS has issued various reports on stablecoin arrangements.

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Basel Committee on Banking Supervision (BCBS)

BCBS is the primary global standard-setting body for prudential bank regulation, which has developed a framework to govern the exposure of banks to crypto assets.

Financial Stability Board (FSB)

The FSB contains the regulatory, supervisory, and oversight recommendations for crypto-asset markets which establishes high-level global standards for crypto regulation.

Financial Action Task Force (FATF)

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FATF is a global authority on anti-money laundering and counter-terrorist financing, it has issued extensive guidance on mitigating illicit finance risks in the crypto sector.

3 Key challenges

Cryptocurrency regulation in the U.S. presents significant challenges due to its fragmented nature, requiring businesses to comply with a complex framework of overlapping and, at times, conflicting federal and state laws.

  1. ​Since each state has different regulations, it makes nationwide operations difficult.
  2. Money transmitter licensing rules differ across states, which may be friendly or strict, making compliance restrictive and complex.
  3. There is a lack of clear crypto-specific laws which forces businesses to interpret existing financial regulations in different ways, leading to uncertainty and misinterpretation.
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Why India needs a strategic cryptocurrency reserve, before it’s too late

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Why India needs a strategic cryptocurrency reserve, before it’s too late
You’re at a dinner gathering. You know, the kind where arguments break out over everything from politics to sports. Then someone, usually the “finance guy” of the group, leans in and says, “If only we had bought Bitcoin 10 years ago.” You roll your eyes. Everyone has that friend. The table erupts in groans. Someone jokes, “Yeah, and if only we had bought land in Mumbai in the ’90s!” Everyone laughs, but deep down, there’s an uneasy truth hanging in the air. You know what they’re saying is right!

Now, imagine that conversation happening not at a dinner table, but inside India’s central bank or finance ministry. The regret isn’t about an individual’s lost opportunity, but about our failure to act as a nation. India, often touted as one of the fastest-growing economies and a future global powerhouse, has yet to secure its stake in the digital asset revolution. By not investing in cryptocurrencies, India risks missing out on one of the most asymmetric financial opportunities of the century.

We have a choice to make: we can either start gradually building strategic cryptocurrency reserves now, leveraging digital assets for diversification and as hedges against financial uncertainty, or wait until these assets become too difficult to accumulate at scale.

ETMarkets.com

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Cryptocurrencies aren’t an experiment anymore. While Bitcoin is the most widely adopted, making it the primary example in this discussion, the broader argument applies to cryptocurrencies as a whole. The Bitcoin network has been operational for over 99.98% of the time since its inception in 2009. Cryptocurrencies have survived wars, regulatory crackdowns, and multiple financial crises. If you had bought Bitcoin at any point and held it for any period of four years, history shows you would have never lost money. Fast forward to the present, and we see major institutions like BlackRock, sovereign wealth funds, and even some national governments securing their exposure to cryptocurrencies as part of their long-term economic strategies.

unnamed (3)ETMarkets.com

Unmatched in contemporary financial history, Bitcoin has increased in value by almost 200X within the past ten years alone. For context, this performance outpaces even the most successful stocks of the last decade. Even NVIDIA grew about 50X and Apple about 10X during the same period. If another asset class showed even close to these returns, we would be stockpiling it as if there were no tomorrow and considering it the ultimate source of value. So, why do we hold cryptocurrencies to such different and higher standards? Does the skepticism still make sense?

Source: ARK Invest; https://www.ark-invest.com/articles/analyst-research/bitcoin-a-unique-risk-off-assetETMarkets.com

There is no denying the fact that the crypto space has seen various scams, rug pulls, meme coins, and bad actors, just like any emerging financial system throughout history. That’s exactly why regulation is necessary and long overdue, to protect investors and ensure responsible adoption. But none of this takes away from the fundamental appeal of cryptocurrencies.

So, here’s the real question… If individuals, corporations, and even some governments are leveraging cryptocurrencies as a strategic asset, why shouldn’t India do the same?

India is a fast-growing economy that is deeply integrated into global trade and exerts sizable influence in the global economy. Despite this, India does not have the privilege of a global reserve currency like the US dollar. Consider this: India represents over 17% of the global population and contributes approximately 7% of global GDP, yet remains vulnerable to external economic shocks. While we have built a strong and well-functioning financial system, our reserves remain concentrated in traditional assets like gold and foreign exchange. A strategic cryptocurrency reserve could serve as a forward-looking hedge against future financial uncertainty.

As the world’s fifth-largest economy with over $600 billion in forex reserves, India’s economic decisions carry global weight. A strategic cryptocurrency allocation would not only diversify our national reserves but could potentially reduce our vulnerability to US dollar fluctuations and provide a hedge against global monetary instability.

Diversification: The Age-Old Wisdom That Still Holds True

Ask any central banker, fund manager, or financial advisor, and they will all agree that diversification is key to successful investing. You don’t put all your eggs in one basket, and you certainly don’t bet the future of an economy on a single asset class. India has always taken a diversified approach, including gold, foreign exchange reserves, and a mix of assets to weather economic storms. But in a world that’s rapidly digitizing, are we really diversified if we’re ignoring digital assets? This becomes particularly relevant as these assets tend to have little correlation with the performance of traditional assets.

Source: ARK Invest; https://www.ark-invest.com/articles/analyst-research/bitcoin-a-unique-risk-off-assetETMarkets.com

So, let’s get one thing clear: Bitcoin isn’t the new digital gold, nor is it here to replace gold. It’s an evolution of value, bringing new utility and possibilities that gold never needed to offer.

Gold and Bitcoin share fundamental traits; both are scarce, resilient, and serve as hedges against uncertainty in different ways. Gold’s value is rooted in tradition and history, while Bitcoin’s is defined by its fixed supply and its digital, decentralized nature.

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But they serve different purposes. Gold is stable, tangible, and time-tested. Bitcoin is borderless, programmable, and built for a digital economy. Bitcoin offers properties that gold cannot match: it can be transferred anywhere in the world in minutes, divided into microscopic fractions, and secured with cryptographic protocols that make theft or confiscation virtually impossible with proper security practices. One preserves value; the other expands its possibilities. If gold is the anchor that keeps wealth steady, then cryptocurrencies are the bridge to the financial future. Neither needs to replace the other; they need to work together.

The US Is Making Big Crypto Moves… Will India Catch Up or Lag Behind?
While we debate whether digital assets deserve a place in sovereign reserves, the United States is already making decisive moves. President Donald Trump recently signed an executive order to establish a strategic Bitcoin reserve, signaling a significant shift in how nations perceive and utilize digital assets. He has even joked about solving America’s deficit with Bitcoin! That might be a stretch, but what’s clear is that they’re taking this seriously.

India stands at a unique geopolitical crossroads, with the opportunity to chart its own path between China’s crypto prohibition and America’s increasing embrace. With our strategic position in the Indo-Pacific region and our growing economic influence, India’s approach to cryptocurrency reserves could become a model for other emerging economies while strengthening our financial sovereignty.

unnamed (7)ETMarkets.com

Meanwhile, we’re seeing entire publicly listed companies built around Bitcoin as a core asset. Take Michael Saylor’s MicroStrategy (now Strategy), which started as a software firm and has now become a Bitcoin powerhouse, holding over $42 billion worth of BTC. This strategy has paid off handsomely. MicroStrategy’s stock has appreciated by over 1,500% since launching its Bitcoin treasury strategy in August 2020. It’s no longer just an investment for some; it’s the foundation of an entire corporate strategy. Countries like El Salvador have adopted Bitcoin as legal tender. According to Chainalysis’ 2023 Global Crypto Adoption Index, India ranks among the top 10 countries globally for cryptocurrency adoption!

If the US and large corporates are preparing for a world where digital assets play a major role in sovereign strategy, why are we still waiting on the sidelines? China tried banning Bitcoin. It didn’t work. The US is embracing it. What’s going to be our move?

The Rising Utility of Cryptocurrencies
An argument that keeps resurfacing is that ‘Crypto is just speculation.’ But reality tells a different story. Digital assets aren’t just another investment class; they’re shaping industries in real-time.

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Take payments: Companies like Microsoft, Starbucks, and AT&T now accept Bitcoin and stablecoins for transactions. The financial system is shifting, whether we like it or not.

Look at investment vehicles: The US’ approval for Bitcoin ETFs has made it easier for institutions to enter the market. Within the first three months of approval, US Bitcoin ETFs attracted over $12 billion in inflows, demonstrating massive institutional demand. More liquidity, more mainstream adoption.

Think about remittances: Millions of people send money across borders every day. Crypto allows them to do it faster, cheaper, and without higher transaction costs, especially in regions with underdeveloped financial markets. The World Bank estimates that remittance fees average 6.4% globally, while cryptocurrency transfers can reduce this to under 1%, saving developing economies billions annually.

India receives over $130 billion in yearly remittances. That’s roughly 15% of all remittances worldwide! Cryptocurrency-based transfers could save Indian families billions in fees while dramatically reducing settlement times from days to minutes. This represents both an economic and social benefit for millions of Indian households.

Then there’s DeFi (Decentralized Finance). The total value locked in DeFi protocols exceeds $100 billion, demonstrating significant market confidence in these new financial systems. The future of finance isn’t being debated; it’s being built on blockchain. And as the real-world utility of digital assets continues to grow, so does their value.

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A Smarter Approach: Start Small, Scale Fast
The argument is about making a strategic, forward-thinking move that positions India at the forefront of the digital economy.

The approach? Start small, think big. A 1-2% allocation in digital assets is a measured step, not a gamble. Track its performance, take cues from early movers like the US, El Salvador, and even large companies like MicroStrategy, and refine the approach as we go. Encourage Indian financial institutions to experiment with crypto-backed financial instruments in a limited way. Instead of waiting on the sidelines, we can proactively shape a regulatory framework that fosters innovation while ensuring stability.

This approach aligns perfectly with India’s broader digital transformation goals under the Digital India initiative. Just as we’ve digitized payments, government services, and identification systems, a measured approach to cryptocurrency reserves represents the next frontier in our digital leadership journey.

unnamed (8)ETMarkets.com

Why Crypto Reserves Make Sense for India

India must think about how we want to position ourselves for the future. Holding digital assets could give India an edge by reducing reliance on external financial systems and insulating us from geopolitical and monetary shifts. It’s about economic sovereignty in a world where financial landscapes are changing fast.

We’ve seen this playbook before. India wasn’t the first mover in digital payments, but we built UPI into a system that the world now looks up to. The same can be done with sovereign crypto reserves… not by following, but by leading. The long-term appreciation of digital assets has been staggering. Cryptocurrencies have outpaced traditional assets in returns, proving that they’re more than just a gamble. A small allocation today could translate into massive financial strength in the coming decades.

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India possesses another unique advantage: the world’s largest pool of technology talent. Our engineers and developers are already contributing to blockchain projects globally. A national strategy for cryptocurrency reserves would not only benefit from this expertise but could potentially create a new sector of high-skilled jobs and innovation hubs across the country, strengthening India’s position as a global technology leader.

Crypto isn’t going away. The real question is… will India be a leader or a follower?

While the Reserve Bank of India has expressed valid concerns about cryptocurrencies in the past, a carefully regulated strategic reserve approach addresses these concerns while capturing the benefits. Many countries, including Singapore and Japan, have demonstrated that thoughtful regulation can mitigate risks while fostering innovation. India has the regulatory sophistication to thread this needle successfully.

We can either start building a strategic reserve today, or in five years, we’ll be at another dinner party, hearing someone say, “If only India had bought Bitcoin back in 2025…” The time to act is now. Let’s not wait until it’s too late.

About the Author
Anurag Arjun, co-founder of Avail, is a seasoned entrepreneur who has founded several successful startups across diverse industries, including cash flow lending, regulatory tech, and blockchain infrastructure. He entered the blockchain space in 2017 with the co-founding of Matic Network, which evolved into Polygon Labs — one of the most prominent platforms for scaling Ethereum.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

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Pakistan to “Legalize” Cryptocurrency Transactions, But More Clarity Needed to Move Forward

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Pakistan to “Legalize” Cryptocurrency Transactions, But More Clarity Needed to Move Forward
Pakistan’s recent decision to “legalize” cryptocurrency transactions and investments marks a pivot from its historically cautious stance on digital assets. However, it is unclear just how the country will implement a proper regulatory framework for Bitcoin (BTC) and other digital currencies. Over the years, Pakistan has made many different announcements, but concrete, decisive action has not been taken. This move—coupled with the formation of the Pakistan Crypto Council (PCC)—aims to integrate blockchain and digital currencies
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President Trump Is Planning a Crypto Reserve With These 5 Coins. Should You Invest in Them? | The Motley Fool

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President Trump Is Planning a Crypto Reserve With These 5 Coins. Should You Invest in Them? | The Motley Fool

Earlier this month, U.S. President Donald Trump announced the creation of the Strategic Bitcoin (BTC 0.31%) Reserve and the United States Digital Asset Stockpile. The former will hold Bitcoin — no surprises there. The latter will hold four more of the largest cryptocurrencies: Ethereum (ETH 1.64%), XRP (XRP -0.34%), Solana (SOL 1.82%), and Cardano (ADA -0.24%).

The fact that the U.S. is stockpiling crypto is exciting news for crypto investors. But are these good cryptocurrency investments? Let’s take a closer look at each one.

1. Bitcoin

Bitcoin is the original cryptocurrency and has also been the most successful. At the time of writing, its market cap is $1.7 trillion, larger than that of every other cryptocurrency combined. Over the last three years (as of March 19), Bitcoin’s price has increased by 98%, well ahead of the S&P 500‘s 27% return.

While Bitcoin was intended as a decentralized digital currency, transactions are too slow and expensive for it to work as a payment method. Processing times generally range from 10 minutes to over an hour, depending on network congestion, and fees are around $1 per transaction.

Despite that, Bitcoin has caught on as a digital store of value, or “digital gold.” The supply is capped at 21 million Bitcoin, adding an element of scarcity to it. If you’re looking for a way to hedge against inflation or add cryptocurrency to your portfolio, Bitcoin is worth considering.

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2. Ethereum

Ethereum is the second-largest cryptocurrency by market cap, and it became popular through introducing smart contracts. A smart contract is a program built into a cryptocurrency’s blockchain network to record transactions.

Developers can use smart contracts to launch decentralized apps (dApps). This gives Ethereum a wide range of uses, including decentralized finance (DeFi) services, such as crypto lending platforms, blockchain gaming, and launching new crypto tokens.

Because Ethereum was the first to offer smart contracts, it has a large lead in terms of market share. According to DefiLlama, Ethereum currently has $46 billion in total value locked into its DeFi applications, the most of any blockchain.

On a negative note, Ethereum’s performance lags behind other smart contract blockchains. The average transaction fee is $0.19 as of March 19, compared to $0.00025 for rival Solana. Ethereum has also lost 34% of its value over the last three years. You’re better off avoiding Ethereum until it proves that it can reverse this downward trend.

3. XRP

XRP is the native cryptocurrency for Ripple, a blockchain designed as a cross-border payment solution. The current system of choice for international payments, the ​​Society for Worldwide Interbank Financial Telecommunications (SWIFT), can take three to five days for international banking transfers. Fees generally cost $15 to $50, depending on the banks involved.

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On the Ripple blockchain, transactions process within four to five seconds for a fee of 0.00001 XRP, a fraction of a cent. In addition to being used for its minimal transaction fees, XRP is also a bridge currency used to facilitate international transfers.

With a real-world use case, XRP is one of the stronger crypto investments currently available. Over the last three years, it has topped every other cryptocurrency on this list with its 187% return. Its biggest headwind since 2020 has been a lawsuit from the Securities and Exchange Commission (SEC), but on March 19, RippleLabs CEO Brad Garlinghouse announced that the SEC had dropped the lawsuit.

4. Solana

Solana is a competitor to Ethereum, as it also provides developers with a platform to launch dApps. The difference is Solana’s unique proof-of-history system for validating transactions, which makes it a far more efficient blockchain.

As mentioned above, the average transaction fee on Solana is just $0.00025. It processes over 4,000 transactions per second (tps). In comparison, Ethereum processes about 17 tps, because it hasn’t developed a fast method to validate transactions like Solana has.

Like all cryptocurrencies, Solana is a high-risk, volatile investment. But it’s up 39% over the last three years, and its speed and low costs should continue attracting developers to the Solana ecosystem.

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5. Cardano

Cardano is another Ethereum competitor that supports smart contracts and allows for the development of dApps. It helped popularize the proof-of-stake system, where people who own a cryptocurrency can pledge their tokens to be part of the transaction validation process and earn rewards. The proof-of-stake system has minimal energy requirements, and even Ethereum adopted it in 2022.

One of the unique things about Cardano is the developers’ dedication to using peer review and evidence-based research. This hasn’t always been to its benefit, though. Cardano’s development has been notoriously slow. For example, it didn’t introduce smart contracts until 2021.

Cardano’s price has decreased by 18% in the last three years. As with Ethereum, it’s best to see if Cardano can build any forward momentum before committing your money to it.

Don’t base your portfolio on the crypto reserve

Just because the U.S. government will be stocking up on these five cryptocurrencies doesn’t mean you should invest in all of them. Cryptocurrency is a risky, unproven asset class. Two of the cryptos on this list, Ethereum and Cardano, have lost value over the last three years. Even though the others have done well, they’re still highly volatile.

As far as crypto investments go, Bitcoin is the safest option, relatively speaking. It’s the most well-known cryptocurrency, and it has been the largest since the very beginning. If you’re looking for cryptocurrencies other than Bitcoin, XRP and Solana are two standout projects. With Bitcoin, XRP, and Solana, you could have a solid crypto portfolio that covers multiple use cases.

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No matter which cryptos you choose, be careful about your asset allocation. Because of the risk involved, cryptocurrency shouldn’t be more than 5% to 10% of your portfolio. Use the rest to invest in stocks, bonds, and other stable assets.

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