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The regulation of virtual currencies in comparative perspective: new private money or niche technological innovation?

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  • Hicham Sadok
  • Mohammed El Hadi El Maknouzi

Abstract

Purpose - This paper aims to situate virtual currencies (VCs) in a landscape of regulatory questions that help orient the direction and purpose of a possible legal approach, vis-à-vis this relatively recent technological and financial phenomenon. Design/methodology/approach - The triangulation of historical overview and comparative examination of regulatory interventions allows to situate VCs in relation to a range of regulatory topics: from monetary policy, to fundraising and money laundering. First, the paper charts the emergence of VCs in time, and situates this innovation on a continuum with historically observed forms of private money. Second, it provides an overview of different regulatory approaches that can be observed on a comparative landscape. Findings - At present, several features of VC schemes (particularly their deflationary character and fixed supply) prevent them from working as private money, competitive with sovereign currency. Instead, three specific kinds of uses – as security tokens, utility tokens and currency tokens – offer a more realistic picture of the risks and potentials associated with different forms of use. Originality/value - The paper puts forth an integrated framework for devising a more sensitive regulatory approach towards VCs.

Suggested Citation

  • Hicham Sadok & Mohammed El Hadi El Maknouzi, 2020. "The regulation of virtual currencies in comparative perspective: new private money or niche technological innovation?," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 24(4), pages 712-724, November.
    • Handle: RePEc:eme:jmlcpp:jmlc-09-2020-0101
    DOI: 10.1108/JMLC-09-2020-0101
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    References listed on IDEAS

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