Regulating Digital Currencies: Bringing Bitcoin within the Reach of the IMF
University of Chicago
April 7, 2013
Chicago Journal of International Law, 14 Chi J Intl L (2013) Forthcoming
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.
Number of Pages in PDF File: 26
Keywords: Bitcoin, IMF, Digital Currency, Speculative Attack
Date posted: April 22, 2013