This post concludes a series on the law and political economy of cryptocurrency. Read the rest of the posts here.
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Even today, many on the left remain in denial about the political power that the digital asset industry has won, viewing cryptocurrency operations as mere grift by bad actors: the pirates, the apes, the nerds, the fakes.
Yet the crypto industry, and tech corporations more broadly, understand digital coins as a foundation of functional sovereignty: governing without the name of government. They aim to generate and mediate social relations, write the rules, extract the value, and bind the subjects. Their infrastructures create new conditions for exchange, wealth, and information. By ignoring these developments, we increasingly live in a dystopian world of monetary fiefdoms, and we find ourselves lacking the legal imagination to meet the moment.
The “cyberpunk” future that many techlords imagined is not coming. It’s already here, if unevenly distributed. An eighteen-year-old in Los Angeles in 2025 (six years after the setting of Blade Runner, the first major U.S. film in the genre) likely experiences money in a richer fashion than most adults, using bank deposits, faux deposits or “platform money,” such as Venmo (PayPal) and Cash App (Block), and various entertainment “currencies” like Robux, whether they hold crypto or not. An 18-year-old in Nairobi might have an even more intense experience: transferring value through stablecoins, M-Pesa (text message money), and even biometric credit in exchange for iris scans. They both watch exchange rates shift and value disappear as platforms rewrite their rules and resolve disputes through algorithmic procedures with no appeal.
These various instruments are not “money” under the legal definitions LPE scholars espouse: governments (at least until recently) have not accepted them to satisfy government debts (such as taxes, fines, fees), nor to settle private debts in courts of law. Another way to say this is that cryptocurrencies, PayPal balances, and gaming points are not “high-powered” money, but they are nevertheless dangerous. Companies can turn “low-powered” money into higher-powered money by expanding into multiple sectors of the economy, scaling user bases, integrating with traditional financial institutions, and securing convertibility into fiat currency.
Already, roughly one in three Gen Xers, Millennials, and Gen Zers consider a digital wallet like Venmo or Cash App their primary checking account, even though the funds are not protected by FDIC insurance or any meaningful equivalent. And while less than 2% of people in the United States use crypto for payments, and only 7% invest in crypto, an intergenerational view suggests that these figures understate the transformation currently taking place: while older folks basically shun crypto, nearly 20% of Millennials report using cryptocurrency, and for Gen Z, crypto is the single most popular investment. It’s also increasingly popular among Black and Latine investors.
Meanwhile, in the world’s largest entertainment industry, video game companies issue private instruments that 19th-century canal, railroad, and mining companies would envy. Roblox, the world’s most popular game, had 80 million daily active users as of November 2024, 30 million of whom were under the age of 13. Gamers can either purchase or earn “Robux,” which they can use in the game or convert to fiat currency (at punitive exchange rates). Last month, due to deep, deep safety concerns, Roblox announced mandatory facial recognition for all users. I’m not sure whether this is a good or bad move, but it is undoubtedly an unprecedented act of power over virtual, monetized economies.
And Roblox is far from alone in attempting to act as a functional monetary sovereign over the youth. In 2022, the creators of Axie Infinity, a crypto-based video game reminiscent of Pokémon, backed by venture capital firm Andreessen Horowitz, promised to lift gamers out of poverty before the game’s primary payment token collapsed in value, plunging three million people, mainly in the Global South, into very-real, fiat-denominated debt. And earlier this month, Sony announced plans to issue its own stablecoin, further opening the portal between “virtual” and “real” monetary systems.
“Real money” or not, younger generations, especially, need vocabulary to name what they experience as monetary power. The techlord’s money is already in our homes, forming us as subjects and laying the foundations for functional sovereignty, while regulators and legal scholars litigate classification.
To meet the moment, we must internalize a key thesis of LPE of Technology scholarship: technology does not “oustrip” the law. Instead, the law actively constructs the conditions of functional monetary sovereignty. Lawmakers make affirmative choices, placing platform prerogatives beyond democratic revision. Last week, for instance, the OCC conditionally approved national bank charters to Circle, Ripple, Paxos, BitGo, and Fidelity Digital Assets. But the industry couldn’t have gotten here without support from both parties and both 2024 Presidential candidates. Democrats who thought existing laws and norms stood a chance against the influence of tech industry campaign donations can thank the likes of Kirsten Gillibrand, Mark Warner, Ritchie Torres, and Ro Khanna.
More importantly, the New Deal and Dodd-Frank visions of financial regulation have proven to be a poor fit to govern 21st-century “Wall Street finance,” much less “Silicon Valley finance.” The old regulatory gaze, rooted in a nostalgia for precise categorization, cannot perceive this new world. It asks “what are you?” when the question should be “whom do you govern, and by what mandate?” Even the progressive orientation asks, “Is the instrument a security or commodity?” when it’s the platform that truly matters. It asks, “Did the consumer or investor consent to this transaction?” when the point of Big Data is social analysis and valuation. We seek safety in familiar inquiries that elide a structural analysis of power fit for the times. As a general matter, individualist and disclosure-based frames—“my transaction, my data, my consent, I demand transparency and recompense”—cannot capture effects that structurally bind, stratify, measure, and predict the behavior of populations.
As defenders of the old regulatory regime attempt to plug an ever-increasing number of holes, the Trumpian right has gone all-in on embracing crypto. The Trump family’s crypto ventures have reportedly generated over $5 billion since January 2025—more than the decades of real estate, reality television, and steaks. The meme coin $TRUMP functions as a loyalty token. More importantly, the Trump Organization holds a 38% stake in World Liberty Financial, which issues stablecoins. When an Abu Dhabi fund uses Trump stablecoins in a $2 billion Binance deal, the Trump Organization profits automatically. The law requires regulation of transactions; the infrastructure generates wealth without it.
Meanwhile, the military and the security services are helping Trump construct functional monetary sovereignty. Indeed, advertisements by Fairshake (the major crypto PAC) rarely, if ever, mention crypto; they promote military service, border security, and “common sense.” In response, the most ardent critics of crypto in Washington offer patriotic opposition, untethered to the authoritarian moment, which, if successful, would exacerbate the problems of financial surveillance, discipline, and punishment that have boosted crypto’s appeal thus far.
There appear to be few limits, if any, to the absurd ingenuity of the techlords of finance. Last week, Trump announced a new space race and a return to the moon. Of course, the U.S. government lacks the capacity to do that without Elon Musk, the satellite and rocket launch monopolist. Indeed, the military relies on SpaceX and its satellite internet subsidiary, Starlink, which Musk is already using to settle payments in the Global South. Eventually, he will use it as a communications infrastructure for X Money—a digital wallet offering peer-to-peer payments to 600 million users. Into the wild blue yonder, to settle the final frontier: a true imperial feat.
Not enough people take infrastructure-building seriously while it happens. The eighteen-year-old in Los Angeles already knows something is wrong. So does the eighteen-year-old in Nairobi. They need frameworks adequate to explain the world they actually live in—a world in which private infrastructure establishes order.
Our collective monetary imagination is too narrow, shallow, and rigid. We’ve all been working with inherited constraints that become less meaningful with each passing day. I won’t pretend to know the exact course we should chart, but I don’t think it’s behind us, as we’ve envisioned it for far too long.
