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A Comparative Analysis of Bitcoin and Other Decentralised Virtual Currencies: Legal Regulation in the People's Republic of China, Canada, and the United States

Hong Kong Journal of Legal Studies, (2015) 9 HKJLS 29

29 Pages Posted: 24 Jan 2015 Last revised: 6 Mar 2017

Matthew P. Ponsford

McGill University - Faculty of Law

Multiple version iconThere are 2 versions of this paper

Date Written: July 24, 2015

Abstract

Bitcoin, also known as a decentralized virtual currency (DVC), is regulated differently in the People’s Republic of China (PRC), Canada, and the United States, and represents a vastly underdeveloped area of the law. No country has currently backed Bitcoin. Launched in 2009, and founded by Satoshi Nakamoto, Bitcoin is a “decentralized peer-to-peer virtual currency.” Other virtual currencies include Litecoin, Namecoin, Auroracoin, Peercoin, and Dogecoin – about 500 varieties in total – but research here primarily focuses on Bitcoin. A comparative analysis helps discern how these respective countries classify Bitcoin (e.g., a virtual object, currency, or potential security), and how these jurisdictions regulate, or intend to regulate, DVCs. Bitcoin is identified as a “currency,” throughout the paper, but the classification is heavily contested. Questions for analyses include: are there appropriate existing legal frameworks to regulate Bitcoin? What securities regulation challenges does Bitcoin pose? What are the consumer and investor protection concerns associated with Bitcoin compared to traditional financial exchanges? What are the cross-jurisdictional challenges of virtual currency transactions that operate over the Internet (e.g., money laundering, or fraudulent activities)? Research incorporates securities commission reports, social and political commentary from secondary sources, and relevant jurisprudence and legislation. Findings help situate the current climate of Bitcoin globally, and assess how its regulation differs relative to technological, economic, social, financial, and political forces.

Keywords: Information Technology Law, Securities Law, Securities Regulation, Bitcoin, Bitcoins, Decentralized Virtual Currencies, Virtual Currency, Cryptocurrency, China, Canada, United States, Fraud, Fraud Detection, Fraud Prevention, Criminal Law, Money Laundering, Terrorism, Technology, Internet, Banking

Suggested Citation

Ponsford, Matthew P., A Comparative Analysis of Bitcoin and Other Decentralised Virtual Currencies: Legal Regulation in the People's Republic of China, Canada, and the United States (July 24, 2015). Hong Kong Journal of Legal Studies, (2015) 9 HKJLS 29. Available at SSRN: https://ssrn.com/abstract=2554186 or http://dx.doi.org/10.2139/ssrn.2554186

Matthew Ponsford (Contact Author)

McGill University - Faculty of Law ( email )

3644 Peel Street
Montréal, Québec H3A 1W9
Canada

HOME PAGE: http://matthewponsford.ca

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