Bitcoin and the challenges for financial regulation

Dominique Guegan () and Anastasia Sotiropoulou
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Dominique Guegan: UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Labex ReFi - UP1 - Université Paris 1 Panthéon-Sorbonne, University of Ca’ Foscari [Venice, Italy]
Anastasia Sotiropoulou: UJM Droit - Université Jean Monnet - Faculté de Droit - UJM - Université Jean Monnet - Saint-Étienne

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Abstract: Bitcoin is the most popular virtual currency and has attracted extraordinary attention as a financial innovation. This attention results less from Bitcoin's role as a digital medium of payment, exchange and store of value, than from the decentralized nature of Bitcoin transactions.Bitcoins pose various risks, some of them being remote and others more immediate. If remote risks do not, presently, require any regulatory intervention, immediate risks should not remain beyond the reach of financial law. Regulators need to put in place frameworks that protect against these risks but in a way that does not restrain innovation. Theoretically, there are three aspects of the Bicoin ecosystem that may be subject to regulation: the Bitcoin system itself (Bitcoin protocol), the uses of Bitcoin and the members of the Bitcoin system. The regulation of the Bitcoin system itself proves extremely difficult as there is no central authority that administers and controls the system, which could be subject to regulation. On the contrary, regulation could apply to illegal uses that can be made of Bitcoins and to some of the members of the Bitcoin system, especially the exchange and wallet service providers.

Keywords: Bitcoin; Regulation; Blockchain (search for similar items in EconPapers)
Date: 2017-10-01
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Citations: View citations in EconPapers (3)

Published in Capital Markets Law Journal, 2017, 12 (4), pp.466-479. ⟨10.1093/cmlj/kmx037⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01899495

DOI: 10.1093/cmlj/kmx037

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