Street Law will be publishing a series of blogs, reflecting the interests of its team members in their chosen subject. The third is on the emergence of cryptocurrencies and is written by Noor El-Louzi, Street Law Legal Researcher.
The emergence of cryptocurrency has given rise to a new economy which allows for the buying and selling of goods using digital or virtual currency. This has been seen to bring about far-reaching ramifications in the legal market. This currency is secured by cryptography; the practice of creating and understanding codes that keep information secret. This practice is based on blockchain technology; a digital system which produces a record of all the occasions a cryptocurrency, such as bitcoin,(1) is bought or sold. This system has constantly grown owing to the increasing activities of buying and selling of these currencies. It is widely accepted that blockchain technology has the potential to radically transform business operating models. This increasing worldwide engagement in buying and selling this virtual currency may potentially render tangible money a universal money. With the pandemic incorporating much of the digital world into our lives, interest in this blockchain has rapidly grown with an increasing willingness to benefit from and adopt this technology.
The legality of the cryptocurrency markets has varied from one jurisdiction to another. While in one category of jurisdictions are countries which permit the operation of cryptocurrency markets, with some particularly so proactive as to enact specific laws recognising and regulating these markets such as Gibraltar and Mexico. Another category comprises countries that have restricted these markets by prohibiting financial institutions operating within their borders from engaging in them including China and Iran.
A type of digital currency which constitutes the first prominent use of blockchain.