Financial Innovation: Digital Assets and Initial Coin Offerings (CRS Report for Congress)
| Release Date |
Oct. 17, 2018 |
| Report Number |
IF11004 |
| Report Type |
In Focus |
| Authors |
Eva Su |
| Source Agency |
Congressional Research Service |
Summary:
This In Focus provides an overview of policy issues
regarding “digital assets” in the capital markets. Digital
assets (often referred to as “crypto assets,” among other
terminology) are digital representations of value made
possible by cryptography and blockchain (see CRS Report
R45116, Blockchain: Background and Policy Issues). They
were originally designed to facilitate transfer of value
without a trusted third-party intermediary (such as a bank).
While debate remains as to the proper terms for and
classification of these assets, a commonly cited industry
source on the topic, Cryptoassets: The Innovative Investor’s
Guide to Bitcoin and Beyond, provides a categorization of
digital assets into three main types:
Cryptocurrencies serve as a medium of exchange, store of
value, and unit measurement of account. Cryptocurrencies
themselves often have little inherent value, but they are
used to price the value of other assets (for more details, see
CRS In Focus IF10824, Introduction to Financial Services:
“Cryptocurrencies”). Bitcoin, launched in 2009—widely
considered the first digital asset—is a cryptocurrency.
Crypto commodities are raw material building blocks that
serve as inputs into finished products. Examples of crypto
commodities are storage capacity and network bandwidth.
Crypto tokens provide means to access finished digital
goods and services in games, media, and more.
Although more than 2,000 digital assets in the forms of
cryptocurrencies and crypto tokens exist today, a majority
of their valuation is contributed by Bitcoin, Ether, Ripple,
and other major cryptocurrencies.
