New Category “Bitcoin”

Having solved the problem of global warming, the next paper I will be writing (in Japanese) will be about the relatively new Internet currency Bitcoin. This is a fascinating topic. I have been posting a couple of comments to the Reddit Bitcoin community and plan to post some of my thoughts here as well.

One of the risks for the long term prospects of the Bitcoin network is that governments may react in a hostile manner. Until now, the project has been flying under the radar of regulation. For example, the relevant EU Directive 2009/110 on the taking up, pursuit and prudential supervision of the business of electronic money institutions could not possibly have been enacted with Bitcoin in mind, since Bitcoin didn’t exist in 2009.

For the time being, any analysis of Bitcoin related law will have to look how existing general rules are applied to this new currency.

But that will very likely change. And one of the risks is that Bitcoin may become illegal. That means there is a need early on to think about what kind of legislation should be enacted in that field.

Anyway, I am just starting out here.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

2 thoughts on “New Category “Bitcoin”

  1. It’s very unlikely to become illegal, there exist already a number of local currency in the world : http://en.wikipedia.org/wiki/Local_currency

    The WIR in Switzerland might be the one that has the largest size : http://en.wikipedia.org/wiki/WIR

    However I think it’s proponent are exaggerating it’s advantage.
    It’s not really anonymous for example : http://anonymity-in-bitcoin.blogspot.fr/2011/07/bitcoin-is-not-anonymous.html
    People who think something that leaks some information is truly anonymous, are being very naive.

    Like

    1. Thanks for the “local currency” link. That is an interesting case for comparison when thinking about what exactly Bitcoin is in the legal analysis.

      I agree that Bitcoin is not completely anonymous. Actually, in contrast to other payment options, one of the characteristics is that all payments are recorded and the records are open to anyone. So if someone knows which address belongs to which person they can reconstruct payment histories from the public blockchain.

      On the other hand, Bitcoin does seem to be more anonymous than bank accounts or credit cards. Both are not available in the EU without verifying your identity (money laundering Directive). That may be actually a disadvantage, since it makes Bitcoin less compatible with regulation against money laundering. It also makes Bitcoin more attractive for all kind of illegal transactions (not an advantage for Bitcoin, in my opinion).

      Like

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