Regulation of digital currency

Summary

What are the risks, problems, advantages and other issues arising from the developments of digital currencies? Are they 'money' and how are they to be regulated?

Researcher

Project background and aims

Digital currency is a ‘disrupter’ of financial services and currency markets and as such presents new regulatory challenges. International regulatory responses to digital currency range from it being largely ignored in a few jurisdictions to outright banning in others with most jurisdictions charting a middle course of ‘wait and see’ while attempting to deal with pressing issues (such as taxation liability and potential money laundering and terrorism financing issues). The research seeks to explain digital currency, its benefits, its problems and its risks and the regulatory response so far. It analyses the extent to which the Australian Securities and Investments Commission (ASIC, the national securities regulator) may or may not have regulatory power and jurisdiction under existing Australian law and the role of other relevant regulators and institutions.

Methodology

The analysis will combine a forensic examination of the technical aspects of Bitcoin digital currency, its nature and consequent real world risks, a comparison to fiat currency and a legal doctrinal analysis of how far it is regulated by existing financial product and financial services regulation under Chapter 7 of the Australian Corporations Act.

Output

  • Paul Latimer and Michael Duffy, “Deconstructing digital currency and its risks: Why ASIC must rise to the regulatory challenge” (2019) 47(1) Federal Law Review 121