Abstract
This article evaluates the legal framework of cryptocurrency in various countries. The new currency instrument is abstract currencies. They are currencies in the sense that they can be exchanged peer-to-peer. They are representations of numbers, i.e. abstract objects. An abstract currency system is a self-enforcing system of property rights over an abstract instrument which gives its owners the freedom to use and the right to exclude others from using the instrument. Cryptocurrency or virtual currency is a cryptographically protected, decentralized digital currency used as a means of exchange. Due to the development of new technologies and innovations, the rate of use of virtual currency is rapidly increasing throughout the globe, replacing not only cash payments and payments by bank transfer, but also electronic cash payments. Among the best-known representatives of cryptocurrencies are Bitcoin, Litecoin and Ethereum. Legal scholars have not yet reached a consensus regarding the nature and legal status of virtual currency. Virtual currency possesses the nature of obligations righ ts as well as property rights, since it may be both a means of payment and a commodity. Depending on the country, the approach to cryptocurrencies may be different. Today there is already an international cryptocurrency community that does not have a single coordinating center. Only progressive jurisdiction and state regulation of cryptocurrency activity will allow the creation of the conditions that will ensure the implementation of legitimate and safe cryptocurrency relations.
Highlights
Cryptographic currencies appeared due to technological progress and the evolution of money as a completely liquid medium of exchange
The Comissão de Valores Mobiliários (CVM) has stated that virtual currencies are to be considered securities only when they pay interest or dividends to their investors, or when they allow for participation in company management through votes
The banking regulator has twice previously issued a warning to consumers saying there are risks involved in trading in virtual currencies, in line with a December 2017 ruling issued by the European Banking Authority (EBA)
Summary
Cryptographic currencies appeared due to technological progress and the evolution of money as a completely liquid medium of exchange. Money is first and foremost a social convention, which emerges to build trust between strangers in their economic transactions, both inter-temporal and in spot markets. A convention of monetary exchange facilitates valuable inter-temporal exchanges that would not occur otherwise According to this view, individuals who may neither know nor trust each other choose to settle their transactions by offering symbolic objects-bank deposits or banknotes, for instance, in exchange for labor, goods and services because they find this trading arrangement superior to the available alternatives.. The past ten years have seen the creation of a new class of digital instruments that are not issued by a sovereign institution or commercial bank, are not denominated in a sovereign unit and do not have physical counterparts. Since these instruments may be used as a currency, they are variously labeled “electronic cash,”“digital currency,” “virtual currency,” or “cryptocurrency.”
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