Will Regulation Change Cryptocurrency Protocols?

20 Pages Posted: 19 Apr 2018

Date Written: April 9, 2018

Abstract

Cryptocurrencies have entered the economy as alternative money, as speculation objects, and as utility tokens for innovative service-platforms. Cryptocurrencies are increasingly scrutinized by regulators, and the literature on the regulation of cryptocurrencies is emerging. In this paper, it is asked how regulatory efforts may interfere with the core of the cryptocurrencies – their protocols as enforced by the decentralized operators. It is found that regulations are likely to induce protocol changes by interfering with the operators' choices. Regulation may induce the development of regulatory-compliant cryptocurrency protocols, but also protocols specially designed to circumvent regulation.

Keywords: Blockchain, Cryptocurrencies, Financial Regulation, Regulation, Payment Systems

JEL Classification: G28, K22, L51, E42

Suggested Citation

Østbye, Peder, Will Regulation Change Cryptocurrency Protocols? (April 9, 2018). Available at SSRN: https://ssrn.com/abstract=3159479 or http://dx.doi.org/10.2139/ssrn.3159479

Peder Østbye (Contact Author)

Norges Bank ( email )

P.O. Box 1179
Oslo, N-0107
Norway

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