Regulatory Ambiguity in the Market for Bitcoin

Abstract

The standard economic approach to considering the effects of a policy tends to neglect the prospect of regulatory ambiguity. I describe four sources of regulatory ambiguity and survey the literature considering the effects of ambiguity on entrepreneurial activity. I also explain how jurisdictional redundancy, where multiple agencies regulate the same action or industry, increases the likelihood of regulatory ambiguity. I offer a brief description of the regulatory environment of bitcoin in the United States in order to provide specific examples of the sources of regulatory ambiguity identified herein.

Keywords: ambiguity, bitcoin, cryptocurrency, regulation, political economy

JEL Classification: E40, E42, E58, G2, H1, K2, K4