The Legal Status of Online Currencies: Are Bitcoins the Future?
Journal of Banking and Finance Law and Practice (2013)
38 Pages Posted: 26 Jun 2013 Last revised: 4 Nov 2013
Date Written: May 1, 2013
Bitcoin has been described as a decentralised virtual currency. Virtual currencies such as Bitcoins are a form of money and a payment system. However, being a decentralised system, there is no central issuer, authority or register-keeper. Bitcoin is unique not because it is a virtual currency, but because it is proof of concept of a decentralized non-issued electronic currency. Regulation of virtual currencies is at a very early stage. Most regulatory regimes are not well designed to cater for this type of payment system. However, creating and protecting trust is a crucial issue in the regulation and public acceptance of new payment services. It is generally accepted that adequate regulation is a key pre-cursor to consumer acceptance of new payment methods, including mobile banking and payments. This paper examines the legal and regulatory status of virtual currencies.
Keywords: banking, payment, consumer protection, bitcoin, central bank, regulation
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