Cryptocurrencies in Public and Private Law

Abstract

The development of cryptocurrency technology has been driven by a desire to create autonomous systems for carrying out digital transactions. The people who use them may neither seek nor want extraneous legal intervention. Property law is as much a kind of state intervention as all the more familiar rules of financial or securities regulation that have attracted so much attention from legal commentators. Property law is default law. If a certain resource can be characterized as an object of property, then the rules of property law apply to it as far as the nature of the resource allows. The view advanced here is that many features of a common law system of property would apply to cryptocurrencies. Once the data comprising crypto-coins are understood for what they are, they should be a suitable object of property. The old binary conception of personal property consisting in chooses in possession and chooses in action should not be an obstacle, if indeed it ever was, to their recognition as property. With some necessary adaptation to allow for the intangibility of crypto-coins, the usual rules of derivative transfer of title and tracing could apply to them. Granted, the common law has no ready-made rules especially designed for cryptocurrencies. But that very absence of rules may be as much an adaptive strength as a systemic failing. The common law grows by a process of principled analogy between the old and the new. The common law provides a reserve of general principle that can provide a default set of property rules for cryptocurrencies without the need for targeted statutory intervention.