“In 2020 and 2021, there was a big crypto bubble. You couldn’t turn a corner without seeing another celebrity crypto endorsement," said Mark Hays, the Associate Director for Cryptocurrency and Financial Technology with AFR/AFREF and with Demand Progress during the NFRPP’s October 25th, 2025, panel discussion. Hilary J. Allen, a Professor of Law at the American University Washington College of Law, joined Hays. The discussion was moderated by Peter Coy, a freelance journalist covering economics, business, and finance.
Celebrities like Kevin Hart, Gwyneth Paltrow, Madonna, Justin Bieber, Serena Williams, Paris Hilton, and Snoop Dogg jumped to endorse crypto-related companies. The record of these endorsements has been poor (Bloomberg), and some are calling for people who endorse these products without doing due diligence to face legal repercussions (Boston College Law Review). The message from the NFRPP’s panel discussion was one of intense skepticism towards cryptocurrencies in general, with Professor Allen going so far as to call them a “failure as a technology.”
The creation of cryptocurrencies was driven by the belief that the current banking system and government-controlled currencies (“fiat” currencies) pose problems. Hays explained that there was a belief that “central intermediaries like banks or regulators were toying with the monetary system in ways that were cheating other people and making the system unfair. They blamed that, rather than malfeasance, for the lead-up to the global financial crisis. And the premise was, what if we could do away with all of that by simply replacing it with technology?”
The technology is the “blockchain,” which creates a centralized ledger that enables the issuance of a digital currency (a “cryptocurrency”) that can be traded safely and securely and is free from counterfeiting. Hays reminded us, “When you look at the history of financial technology, one of the biggest innovations hundreds of years ago was the creation of a double-entry book ledger, where people could more accurately record money coming in and money coming out. And the key to that was there was one central database with one person minding the store.” And as Allen explained, cryptocurrencies use the blockchain as an evolution to this centralized ledger technology, so “cryptocurrency is a notation on a database [blockchain]. And if there is a recordation on there that you own something associated with that blockchain, then you own a piece of cryptocurrency.”
Peter Coy noted that the concept of an entry in a ledger as the thing that records value is how all modern assets are recorded. “The deed to my house is also on a ledger somewhere. So, being on a ledger doesn't mean it's not a real asset.” The concept of a currency represented by entries in a safe, secure, decentralized ledger is not, by itself, a bad idea. The problems with the idea only become evident when the concept is converted into reality, and the list of those problems was the subject of much of the discussion. “That's the theory. Whether that works in practice is something I think we're skeptical of,” said Allen.
Coy recalled a quote that cryptocurrency is “like a laboratory for money because we are seeing the crypto people rediscover year by year all the lessons that were learned about regular money over centuries.” But as with many new technologies (AI was mentioned several times as being on a similar path), advocates argue that regulation will stifle the new industry; therefore, it should be left as unregulated as possible. In crypto, the people involved want companies to act like banks, but without the regulations traditional banks must follow.
So, does cryptocurrency work well as an alternate form of money? The answer appears to be mostly “no”. Allen noted that, because a cryptocurrency like Bitcoin has (in principle) only a fixed number of coins, it is, by design, deflationary. “Assuming that the fixed supply does remain fixed…think about it. If you know that your money will always buy more tomorrow than it will today, then that's encouragement not to spend it. And deflation is worse for economic conditions than inflation … that this is a deflationary currency … is a terrible idea.” Cryptocurrencies were shown not to be great as payment systems; they ended up being primarily (when used for legal purposes) an investment.
Cryptocurrencies aim to be both money (a form of payment) and investments (something expected to increase in value). Allen explained that it’s not possible to be both. Once it became “clear that this wasn't going to work very well as a money or a payment… what it became was something that people bet on the value. So that's where the investment part of it came in. But you can't be both money and an investment, because with money, you need the price to stay stable, with an investment, you need it to increase. So, you must pick one, or as I like to say, pick neither.”
How about the rationale for crypto that creates a “trustless” currency, in which you can replace your “faith” in a central bank with technology (the blockchain). Does that argument hold up in real life? As Allen describes, “I understand a lot of the distrust that motivated the creation of crypto, but the fact of the matter is, it just means you're trusting someone else. You're trusting whole other individuals, a place without transparency into who is running the show. No regulation would protect people's identity. So, you're not eliminating trust. You're just putting your trust in an unregulated system, and for so many reasons, including this privacy reason, I think that's a little bit of a scary thing to do.”
“Will it ever replace fiat currency? I kind of hope not. And the reason is, I think this is a broader governance question. The origin story of crypto and Bitcoin is built around the idea that we can never trust central banks, and there's certainly a lot of critique one can have about the central bank system. In hundreds of years of history, we learned the hard way … we decided to privatize aspects of monetary policy, and that doesn't work out well for a lot of people. In our country today, many of the sovereign rights associated with currency are held by governments. That's because governments, as flawed as they are for now, are democratically elected and controlled. And we can inform how money works through those government-issued currencies. The idea of having some global currency or some decentralized currency sounds attractive until you think about the reality of how crypto works, which is today, and likely in the future, it is not truly decentralized, and therefore it is just as subject to the same kinds of controlled wealthy interests that we see in our current financial system. You are essentially replacing one set of masters with another,” added Hays.
Does anyone use crypto as a payment mechanism? Apparently, yes. Professor Allen noted that “crypto is being used to fund half of the North Korean nuclear program. The goal of all ransomware attacks is to target infrastructure. We're starting to see gruesome crimes. There was a spate of them in France, where people were having their fingers dismembered in kidnappings, trying to get access to crypto cold storage wallets. There are consequences when you operate in a space without laws.”
If cryptocurrencies are not particularly useful as payment systems, it’s worth asking why interest in them remains so high. The reason is that deep-pocketed investors inject funds into the companies, advertising, and lobbying to create the regulatory environment they want. Hays explained that “because crypto entities can find money from wealthy venture capital firms, which are often the seed funders for a lot of their platforms, …they can sort of literally print their own money. They spent a tremendous amount of money in the 2024 election cycle, targeting many different political figures, and soon found rapport with the Trump family and campaign. They have been very successful in that regard. They spent more money than pretty much any other corporate entity in the 2024 elections.”
Allen believes “we desperately need campaign finance reform” to address the threats posed by cryptocurrencies to the financial system. Short of that, talking about the issue, like we do on the NFRPP, is the next best thing. With this information, as Hays says, it is then “up to people who are being asked to sign up for this new version of finance without really being told what's under the hood to call their policymakers to say, ‘Hey, I didn't sign up for this. ‘” Are we sure this is the right direction to go?’"
The complete program can be viewed at https://youtu.be/4z0ym5kTdaY?si=YUAkGtQHAsGsXOkX
Leigh M. Chinitz, Ph.D. is a trustee of The Network for Responsible Public Policy.
