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Regulating Digital Currencies: Bringing Bitcoin within the Reach of the IMF

26 Pages Posted: 22 Apr 2013  

Nicholas Plassaras

University of Chicago

Date Written: April 7, 2013

Abstract

This paper examines the potentially destabilizing effects of emerging digital currencies on the international foreign currency exchange. Specifically, it examines “Bitcoin,” a decentralized, partially anonymous, and largely unregulated digital currency that has become particularly popular in the last few years. The paper argues that the International Monetary Fund, the institution responsible for coordinating the stability of foreign exchange rates, is ill-equipped to handle the widespread use of Bitcoins into the foreign exchange market. It highlights the inability of the Fund to intervene in the event of a speculative attack on a currency by Bitcoin users. The paper concludes by suggesting two interpretations of the Fund’s incorporating document, the Articles of Agreement, which would allow it to intervene in the event of such an attack.

Keywords: Bitcoin, IMF, Digital Currency, Speculative Attack

Suggested Citation

Plassaras, Nicholas, Regulating Digital Currencies: Bringing Bitcoin within the Reach of the IMF (April 7, 2013). Chicago Journal of International Law, 14 Chi J Intl L (2013) Forthcoming. Available at SSRN: https://ssrn.com/abstract=2248419

Nicholas Plassaras (Contact Author)

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

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