Thesis: iEthereum – Currency or Not?

One of the exciting aspects of discussing a topic that remains largely unexplored in the vast world of the Ether is the freedom it grants us to openly discuss, speculate, and theorize without the constraints of established narratives. For us, the focus of this exploration is iEthereum.

The entire crypto space is grappling with a need for regulatory clarity and legal definition. I’ve always held the view that in the United States, if there are no explicit laws governing an action, then it can be considered legal. I refer to actual laws—not bureaucratic policies implemented by government institutions. For instance, policies from the IRS or SEC do not equate to law. Many constitutional scholars argue that these institutions lack legal standing or jurisdiction over us. As government becomes increasingly corrupted and tyrannical, I find myself aligning more with these perspectives. Yet, it is important to acknowledge the heavy hand that enforces these policies, relishing its power.

iEthereum, like many cryptocurrencies, exists within a gray area of regulatory precedent and policy parameters. For years, individuals and institutional entities have called for greater clarity and guidance—whether motivated by innovative aspirations or fear of potential legal repercussions. Both motivations are natural and understandable.

Is iEthereum a cryptocurrency?
Is iEthereum a commodity?
Is iEthereum a utility token?
Is iEthereum a security?
Is iEthereum money?

Being early adopters of iEthereum allows us to engage in meaningful discussions, debates, and theorizing around these questions. If our voices gain enough traction and influence, we might even help shape the arguments surrounding these classifications. To be clear, we have no vested interest in this debate. Our current stance is that iEthereum is a digital asset—a form of money that does not qualify as a security under the established Howey Test.

There is a common misconception that money is synonymous with currency. This is not entirely accurate. Money is a broader term encompassing various forms, not limited to currency. Currency is simply one form of money; money can be defined as any item or medium of exchange that embodies perceived value.

Based on this definition, iEthereum can be categorized as “any item” or “medium of exchange,” similar to stocks, bonds, commodities, utility (such as skills or functions that can be bartered), banknotes, contracts, deeds, and more.

So, what exactly is iEthereum? The complexity of this question can be confusing.

We have published or scheduled numerous articles exploring the parameters that define what iEthereum is or is not. We have concluded that as a form of money, iEthereum will ultimately be classified as either a digital commodity, utility token, or currency. Our opinion leans towards viewing iEthereum as a digital commodity. However, we acknowledge that it may be regulated under any of these classifications.

Today, we will delve into the question of whether iEthereum can be considered a currency.

In a rapidly evolving digital world, the nature of what constitutes a currency is continuously debated. Bitcoin, Ethereum, and other cryptocurrencies are often grouped under the term "currency." However, this thesis posits that iEthereum, despite its blockchain-based foundation, should not be considered a currency. By examining iEthereum’s functionality, regulatory interpretations, and its key characteristics, this paper argues that iEthereum is better classified as a utility token or digital asset. This distinction carries significant implications for its utility, regulatory treatment, and future within decentralized financial systems.

To determine whether iEthereum qualifies as a currency, we first need a clear definition. According to both economic theory and regulatory frameworks, a currency typically possesses three core functions:

Additionally, currencies often have characteristics such as regulation by a central authority and supply adjustment mechanisms in response to economic conditions. With this framework in mind, we can assess how iEthereum measures up.

At its core, the essence of any currency lies in its ability to facilitate transactions. iEthereum is specifically designed to enable seamless peer-to-peer and business-to-business payments, remittances and or transfers. The decentralized nature of iEthereum allows users to transact directly without the need for intermediaries, reducing costs and increasing transaction efficiency. This functionality aligns with the fundamental purpose of currency: to act as a medium of exchange.

iEthereum simplifies P2P transactions by providing a secure, fast, and low-cost alternative to traditional payment systems. Users can transfer value instantly across borders, overcoming the limitations imposed by conventional banking channels. This capability fosters economic inclusivity, allowing individuals in underbanked regions to participate in the global economy.

Similarly, iEthereum's utility extends to B2B transactions. Businesses can leverage iEthereum to settle payments swiftly, reducing transaction times from days to mere minutes. This efficiency enhances liquidity, enabling companies to manage cash flows more effectively. Moreover, the transparency and security provided by blockchain technology reduce fraud risks and ensure transaction integrity, further encouraging businesses to adopt iEthereum as a viable payment solution.

iEthereum, built on the ERC-20 standard, is primarily designed to enable specific tasks within decentralized applications (dApps) rather than serving as a broad-based currency. Its core functions, such as transferring balances, approving transactions, and managing allowances, are integral to blockchain ecosystems but do not support general economic activity.

For example, while iEthereum can be used as a medium of exchange, this is typically limited to niche environments that support it, such as decentralized finance (DeFi) platforms. Outside these narrow contexts, iEthereum does not enjoy widespread acceptance and, thus, cannot be considered a general medium of exchange.

A key characteristic of a currency is its use as a unit of account, meaning it is used to price goods and services. iEthereum does not fulfill this role, as it is not commonly used to denominate prices beyond its niche blockchain applications. Additionally, iEthereum lacks the stability necessary to serve as a store of value, an essential attribute for any currency. Its volatility makes it unreliable for holding purchasing power over time, a role better suited for stablecoins like USDT or fiat currencies like the US dollar.

iEthereum's primary use cases revolve around its unlimited open source permission-less functinality not yet defined; ie token-based voting, share management, and other decentralized functionalities. Its integration with tools like Token Factory and Mist Wallet underscores its utility within specific blockchain environments, distinguishing it from currencies that operate in broader, more diverse economic contexts.