SHOW ME THE (NEW KIND OF) MONEY.

• Author: Sewell, Brian G.
• Position: BUSINESS & FINANCE - Cryptocurrency

SINCE 2010, when it emerged as the first legitimate cryptocurrency, Bitcoin has been declared "dead" by pundits countless times. Critics have cited hair-raising price volatility and scalability challenges to handle a large volume of transactions as a payment method, as well as the improbability of a central bank ceding monetary control to a piece of pre-set software code. The adoption of Bitcoin as an alternative to transacting by credit card or other payment methods is rising. After its release as open-source software in 2009, Bitcoin alone has facilitated more than 300,-000,000 digital transactions, while hundreds of other cryptocurrencies have emerged, promising to disrupt a host of industries.

Granted, no more than 3.5% of households worldwide have adopted cryptocurrency as a payment method but, as developers and regulators resolve the following key issues, global cryptocurrency adoption likely will grow--as a consumer payment method and through business-to-business integration, streamlining a variety of operations in the private and public sectors.

The prospect of more-widespread adoption explains why cryptocurrencies may continue to outperform other investment assets in the long term and improve how the world does business.

There are four key reasons why cryptocurrency is here to stay:

A Securities and Exchange Commission-approved Bitcoin ETF (exchange-traded fund) can boost liquidity, protect consumers, and nurture innovators. Though the SEC will not reach a final decision until later this year on the proposed listing of SolidX Bitcoin Shares ETF, I think the agency eventually will approve what many say represents the best proposal for a cryptocurrency ETF. The proposal seems to meet the SEC's criteria on valuation, liquidity, fraud protection/custody, and potential manipulation.

By boosting institutional investment, SEC approval would represent another milestone in the validation of cryptocurrencies. Rising adoption could benefit the U.S. financial system and others worldwide because cryptocurrency promises to streamline how the world transacts for goods and services, updates mutual ledgers, executes contracts, and accesses records.

Comprehensive U.S. regulation can improve protection, innovation, and investment. Beyond a potential Bitcoin ETF, demand is mounting for a comprehensive regulatory framework that protects consumers while nurturing innovation. Because the dollar remains the leading global fiat currency, institutional...