Close this search box.
Close this search box.

New Theoretical Framework Sheds Light on Global Cryptocurrency Regulation

New Theoretical Framework Sheds Light on Global Cryptocurrency Regulation

Cryptocurrency & Blockchain News

Waseda University researchers unveiled a new framework for understanding the disparate regulatory approaches to cryptocurrency worldwide. This innovative framework, inspired by James C. Scott’s concept of ‘legibility’, offers a fresh perspective on the contentious issue of cryptocurrency governance.

Cryptocurrency, since its inception, has been at the forefront of global financial discussions, with varying degrees of regulation implemented by different countries. While some nations have embraced comprehensive regulations, others have shown reluctance or even banned cryptocurrencies outright. This variation in regulation, previously unexplained, is now addressed by the new theoretical model developed by Associate Professor Jack Seddon from Waseda University and Associate Professor Miles Kellerman from Leiden University.

セドン ジャック 准教授 (SEDDON Jack) – 早稲田大学 政治経済学術院 (

Published in the journal Business and Politics on February 5, 2024, their study explores the idea of ‘legibility’ – the degree to which markets are acknowledged and legitimized by the state.

This concept helps to unravel the complex interplay between market demand and state regulatory measures, offering a nuanced understanding of the evolution of the cryptocurrency market and financial markets at large.

The framework conceptualizes the regulation dynamic as a balance between market demand for regulation and the state’s willingness to enforce it. This approach challenges the prevailing notion that public agencies naturally seek to regulate markets. Seddon explains, “The debate over cryptocurrency regulation is essentially a political struggle to define the market’s visibility to the state.”

Using this framework, the researchers identified four ‘legibility states’ of markets – pure illegibility (low demand and supply), contested legibility (high supply, low demand), contested illegibility (high demand, low supply), and collaborative legibility (high demand and supply). These states encapsulate the different stages markets go through in their regulatory journey.

The study applies this framework to the cryptocurrency markets in the United States, the European Union, and Japan.

It was observed that these regions have traversed through various stages of legibility at differing rates. The United States is currently in a phase of contested legibility, while the European Union has moved from contested to collaborative legibility. Japan notably progressed rapidly from pure to collaborative legibility.

This progression analysis revealed that once markets reach a state of collaborative legibility, they seldom regress. The results underscore the applicability of the legibility framework to a broader spectrum of markets, a direction the researchers intend to explore further.

Dr. Kellerman emphasizes the study’s relevance, noting that understanding the dynamics of legibility can inform more effective financial regulations. “Our findings highlight the need for timely regulatory interventions in markets like cryptocurrency. Where prolonged contested legibility can delay consumer protection measures,” he said.


Authors: Miles Kellerman1 and Jack Seddon2

Title of original paper: Into the ether or the state? Legibility theory and the cryptocurrency markets

Journal: Business and Politics


is Waseda University good?