A Comparative Analysis of Bitcoin and other Decentralized Virtual Currencies: Legal Regulation in the People’s Republic of China, Canada, and the United States
Harvard Journal of Law & Technology Digest, (2015) Harv JL & Tech Dig
Posted: 25 Aug 2015 Last revised: 6 Mar 2017
Date Written: November 14, 2015
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: Suggested Citation