Academic Seminar Series
Cryptocurrency Regulation: Protective vs. Enabling Approaches
Jillian Grennan
Emory University
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Abstract
Protective regulation aims to safeguard consumers yet may impose frictions that inhibit entrepreneurial activity. I study this tension in the context of U.S. state cryptocurrency licensing laws using novel data linking regulatory announcements, startup formation, investment, hiring, and patenting. Markets respond negatively to protective legislation, but regulated states subsequently experience more entrepreneurial activity. Difference-in-differences estimates exploiting staggered adoption show that licensing requirements increase startup entry, capital raised, patent applications, and hiring – especially in engineering and compliance roles. To account for this divergence between market reactions and real outcomes, I develop a model in which regulatory intensity generates asymmetric responses by firm quality and size. Consistent with the model, the evidence indicates that protective regulation creates a certification channel that benefits high-quality entrants while discouraging lower quality competitors.
Professor J. Grennan is an economist whose research provides actionable insights for practitioners navigating value creation, emerging technologies, and collective decision-making. Her academic expertise extends to emerging financial technologies (FinTechs) catalyzed by artificial intelligence (AI) and blockchain advancements. Her research has been published in Journal of Financial Economics, Journal of Financial and Quantitative Analysis and Review of Financial Studies and she investigates the effects of AI on high-skilled work, the relationship between market efficiency and AI signals, decentralized governance and DAOs, the competitive dynamics between incumbents and FinTech startups, and the evolving regulatory needs arising from AI, cryptocurrencies, and decentralization. She received her Ph.D. from The Wharton School at the University of Pennsylvania (2014), an M.S. from Georgetown University, and a B.A. from Wellesley College. Finally, Professor Grennan is a visiting scholar at the Federal Reserve Bank of Atlanta. For more details, visit https://www.jilliangrennan.com/.
This seminar will be online on Teams. Click here to attend
