Is Bitcoin Money?: Implications for Bitcoin Derivatives Regulation and Security Interest Treatment of Bitcoins Under Article 9 of the Uniform Commercial Code
23 Pages Posted: 21 Jun 2015
Date Written: December 17, 2014
This paper explores legal and economic issues related to a fascinating new technology called the blockchain protocol. The most popular and important blockchain commodity is currently bitcoin (Part I). Bitcoin is intuitively understood as a “virtual currency.” However, it is possible that bitcoin fails to meet an economist’s definition of money (Part II). In Part III, I survey the academic literature and conduct an empirical study of my own that compares bitcoin prices and other assets from July 12, 2013 until December 16, 2014. Ultimately, I conclude that bitcoin is not money and does not behave like money. Later, I analyze two potential legal questions connected to the question of whether bitcoin is money: how will bitcoin derivatives be regulated? (Part IV), and whether transferred bitcoins are free of security interests under Article 9 of the Uniform Commercial Code (Part V).
Keywords: bitcoin, derivatives, regulation, uniform commercial code, UCC, money, mpesa, currency, blockchain, Nakamoto
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