The Legal Status of Online Currencies – Are Bitcoins the Future?

38 Pages Posted: 22 Feb 2016 Last revised: 7 Dec 2016

See all articles by Rhys Bollen

Rhys Bollen

Monash University - Faculty of Law

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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

Suggested Citation

Bollen, Rhys A., The Legal Status of Online Currencies – Are Bitcoins the Future?. Melbourne Business School, 2016 Financial Institutions, Regulation & Corporate Governance (FIRCG) Conference, Available at SSRN: or

Rhys A. Bollen (Contact Author)

Monash University - Faculty of Law ( email )

Wellington Road
Clayton, Victoria 3800

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