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Regulation of Cryptocurrencies: Evidence from Asia and the Pacific


  • Jose Antonio Pedrosa-Garcia

    () (United Nations ESCAP)

  • Yasmin Winther De Araujo Consolino Almeida

    () (Macroeconomic Policy and Financing for Development Division, ESCAP)


This paper reviews the key features of cryptocurrencies and their underlying technology, blockchain. It becomes clear that cryptocurrencies do not fulfill the three functions of money, at least for the moment, but should instead be understood as high-risk, high-profitability securities. While there are great opportunities such as increased remittances, their potential disruption of economic activity, and particularly of monetary policy is mind-blowing. Under this premise, and keeping in mind hackers’ heists suffered by cryptocurrency exchanges, it is important to regulate cryptocurrencies. Four core questions countries should decide on are: whether they consider cryptocurrencies’ legal tender, whether they allow cryptocurrency exchanges to operate (and if so, how); whether Initial Coin Offerings (ICOs) should be allowed (and if so, how); and whether they allow mining. Several policy options are presented, both from a theoretical perspective, and as they have been implemented by countries in Asia-Pacific. While countries such as China have decided to be restrictive, others such as Japan have chosen to regulate to let the sector thrive. Such diversity may be understandable, given that is such a novel technology that still poorly understood – especially its evolution. This diversity of standards offers great room for regulatory arbitrage, and highlights a great need for global coordination on cryptocurrency regulation and supervision.

Suggested Citation

  • Jose Antonio Pedrosa-Garcia & Yasmin Winther De Araujo Consolino Almeida, 2018. "Regulation of Cryptocurrencies: Evidence from Asia and the Pacific," MPDD Working Paper Series WP/18/03, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
  • Handle: RePEc:unt:wpmpdd:wp/18/03

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    References listed on IDEAS

    1. repec:eee:corfin:v:50:y:2018:i:c:p:223-242 is not listed on IDEAS
    2. repec:bla:buecrs:v:70:y:2018:i:3:p:205-225 is not listed on IDEAS
    3. Ardic, Oya Pinar & Heimann, Maximilien & Mylenko, Nataliya, 2011. "Access to financial services and the financial inclusion agenda around the world : a cross-country analysis with a new data set," Policy Research Working Paper Series 5537, The World Bank.
    4. Frunza, Marius-Cristian, 2015. "Solving Modern Crime in Financial Markets," Elsevier Monographs, Elsevier, edition 1, number 9780128044940, July.
    5. William Jack & Tavneet Suri, 2011. "Mobile Money: The Economics of M-PESA," NBER Working Papers 16721, National Bureau of Economic Research, Inc.
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    More about this item


    Cryptocurrencies; Blockchain; Bitcoin; Regulation;

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • K24 - Law and Economics - - Regulation and Business Law - - - Cyber Law
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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