Keeping up with cryptocurrencies

How financial regulators used radical innovation to bolster agency reputation

Authors

  • Lauren Fahy Utrecht School of Governance
  • Scott Douglas Utrecht School of Governance
  • Judith van Erp Utrecht School of Governance

DOI:

https://doi.org/10.26116/techreg.2021.001

Keywords:

cryptocurrency, innovation, regulatory agencies, financial regulation, reputation management, Bureaucratic reputation

Abstract

Invented in 2008 with Bitcoin, cryptocurrencies represent a radical technological innovation in finance and banking; one which threatened to disrupt the existing regulatory regimes governing those sectors. This article examines, from a reputation management perspective, how regulatory agencies framed their response. Through a content analysis, we compare communications from financial conduct regulators in the UK, US, and Australia. Despite the risks, challenges, and uncertainties involved in cryptocurrency supervision, we find regulators treat the technology as an opportunity to bolster their reputation in the immediate wake of the Global Financial Crisis. Regulators frame their response to cryptocurrencies in ways which reinforce the agency’s ingenuity and societal importance. We discuss differences in framing between agencies, illustrating how historical, political, and legal differences between regulators can shape their responses to radical innovations.

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Author Biographies

Lauren Fahy, Utrecht School of Governance

Lauren Fahy is a PhD fellow at Utrecht School of Governance, Utrecht University, the Netherlands.

Scott Douglas, Utrecht School of Governance

Scott Douglas is assistant professor of Public Management at Utrecht School of Governance, Utrecht University, the Netherlands.

Judith van Erp, Utrecht School of Governance

Judith van Erp is professor of Regulatory Governance at Utrecht School of Governance, Utrecht University, the Netherlands.

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Published

2021-03-31

How to Cite

Fahy, L., Douglas, S., & van Erp, J. (2021). Keeping up with cryptocurrencies: How financial regulators used radical innovation to bolster agency reputation. Technology and Regulation, 2021, 1–16. https://doi.org/10.26116/techreg.2021.001

Issue

Section

Articles