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The alegality of blockchain technology
[El Salvador becomes first nation to bitcoin legal tender]

Author

Listed:
  • Primavera De Filippi
  • Morshed Mannan
  • Wessel Reijers

Abstract

Similar to the early days of the Internet, today, the effectiveness and applicability of legal regulations are being challenged by the advent of blockchain technology. Yet, unlike the Internet, which has evolved into an increasingly centralized system that was largely brought within the reach of the law, blockchain technology still resists regulation and is thus described by some as being “alegal”, i.e., situated beyond the boundaries of existing legal orders and, therefore, challenging them. This article investigates whether blockchain technology can indeed be qualified as alegal and the extent to which such technology can be brought back within the boundaries of a legal order by means of targeted policies. First, the article explores the features of blockchain-based systems, which make them hard to regulate, mainly due to their approach to disintermediation. Second, drawing from the notion of alegality in legal philosophy, the article analyzes how blockchain technology enables acts that transgress the temporal, spatial, material, and subjective boundaries of the law, thereby introducing the notion of “alegality by design”—as the design of a technological artifact can provide affordances for alegality. Third, the article discusses how the law could respond to the alegality of blockchain technology through innovative policies encouraging the use of regulatory sandboxes to test for the “functional equivalence” and “regulatory equivalence” of the practices and processes implemented by blockchain initiatives.

Suggested Citation

  • Primavera De Filippi & Morshed Mannan & Wessel Reijers, 2022. "The alegality of blockchain technology [El Salvador becomes first nation to bitcoin legal tender]," Policy and Society, Darryl S. Jarvis and M. Ramesh, vol. 41(3), pages 358-372.
    • Handle: RePEc:oup:polsoc:v:41:y:2022:i:3:p:358-372.
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    File URL: http://hdl.handle.net/10.1093/polsoc/puac006
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    References listed on IDEAS

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    1. De Filippi, Primavera, 2014. "Bitcoin: a regulatory nightmare to a libertarian dream," Internet Policy Review: Journal on Internet Regulation, Alexander von Humboldt Institute for Internet and Society (HIIG), Berlin, vol. 3(2), pages 1-11.
    2. De Filippi, Primavera & Mannan, Morshed & Reijers, Wessel, 2020. "Blockchain as a confidence machine: The problem of trust & challenges of governance," Technology in Society, Elsevier, vol. 62(C).
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    Cited by:

    1. Judith Clifton & Leslie A Pal, 2022. "The policy dilemmas of blockchain [Blockchain technology and decentralized governance: Is the state still necessary?]," Policy and Society, Darryl S. Jarvis and M. Ramesh, vol. 41(3), pages 321-327.
    2. Cagigas, Diego & Clifton, Judith & Diaz-Fuentes, Daniel & Fernández-Gutiérrez, Marcos & Harpes, Carlo, 2023. "Blockchain in Government: Towards an Evaluation Framework," 32nd European Regional ITS Conference, Madrid 2023: Realising the digital decade in the European Union – Easier said than done? 277947, International Telecommunications Society (ITS).

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