BIS Economic Adviser: Cryptocurrencies Should Be Considered Securities

"If people pay to hold the tokens for financial gain, then arguably they should be treated as a security and come under the same rigorous documentation requirements and regulation as other securities offered to investors for a return."

Shin's words echo those of Governor of the Bank of England Mark Carney, who called for the regulation of cryptocurrencies rather than to "Ban them outright" in March.

Carney argued that it is appropriate to incorporate the digital currency ecosystem into the rest of the financial system, subjecting it to the same regulatory approach and the same "Rigorous standards."

While the U.S. Securities and Exchange Commission does not consider either Bitcoin or Ethereum to be securities, head of the SEC Jay Clayton has previously stated that every initial coin offering that the SEC has seen so far would be considered a security.

"You can call it a coin, but if it functions like a security, it's a security."

"Where I give you my money and you go off and make a venture [] and in return for me giving you my money, you say, 'You know what, I'm going to give you a return.' That is a security, and we regulate that. We regulate the offering of that security, and we regulate the trading of that security."

The BIS, which is a Switzerland-based bank for central banks operating under the auspices of international law, recently conducted a study asserting that cryptocurrencies will not be able to scale sufficiently to become a medium of exchange in a global economy.

In the report, the bank lists three major "Shortcomings" that will keep crypto from replacing money: "Scalability, stability of value, and trust in the finality of payments."