As the summer continues to heat up so does the digital asset industry with two major developments.

The Libra announcement last month represented a milestone in the cryptocurrency industry. Libra, with the backing of mainstream tech players like Facebook and traditional financial firms like MasterCard, became the first cryptocurrency with the potential to go “mainstream.” Everyone knows about bitcoin, but even bitcoin still has an aura of inaccessibility to it and the price volatility of bitcoin makes its use as an everyday currency difficult to imagine. Libra, on the other hand, with its Facebook backing, access to potentially billions of users, as well its built-in price stability could quickly surpass bitcoin in terms of value and utility. The intense media and government attention that Libra has received, even prior to its launch, demonstrates the power of Facebook and other big tech firms in bringing mainstream attention to cryptocurrencies.  

That is not to say, however, that the mainstream and regulatory reception of Libra has been positive. Central bankers and finance ministers from the United States, France, and England have spoken out against the coin. President Trump recently tweeted his disdain for cryptocurrencies and suggested that Facebook may need a banking charter. Senators from both parties lit into Facebook executive David Marcus in a recent Senate Banking Committee hearing. Even Mark Cuban, the outspoken tech entrepreneur and star of the reality show “Shark Tank” panned Libra as a “big mistake.” Additionally there are many unanswered questions about how Libra will work and where will be it be legal. 

Setting aside for a moment the strong individual and corporate personalities involved, the largely negative reception to Libra can be viewed both as the natural growing pains of a new technology that threatens the status quo and a sign that that cryptocurrencies still face major legal and technical hurdles to gaining widespread acceptance.

On a different note, Blockstack, a company that allows developers to build decentralized apps, announced on July 10, 2019 that it had become the first company ever to offer digital tokens regulated by the SEC.  The Blockstack token will not be a currency but rather a digital representation of a security.  Blockstack said that it had been granted qualification under SEC’s Regulation A+ registration exemption, which allows small issuers to solicit non-accredited investors without all of the hassle of a full IPO. Blockstack’s offering, while not as potentially revolutionary to everyday life as Libra, is certainly a breakthrough in legal and regulatory circles for those working for the digitization of assets. However, it’s unlikely that the Blockstack approval heralds an opening of the floodgates to SEC-approved digital coin offerings.

Notably, a number of companies have tried using the Reg A+ exemption to make initial coin offerings over the past two years with little success. There is no indication from the SEC that Blockstack’s approval will change the landscape. The economic case for issuing digital assets via a Reg A+ has not been proven, particularly since the cost of securing the SEC approval will likely prohibit many other would-be ICO contenders from seeking a similar path to market.

In sum, with regard to both LIBRA and Blockstack, only time will tell whether the summer of 2019 is remembered not only for its record heat waves but as the moment when the movement to decentralized digital assets and currencies took an important step toward mainstream adaptation.