THE LEGAL NATURE OF BITCOIN AND ITS COMPATIBILITY WITH DIFFERENT NATURES
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Abstract
The prevalence of Bitcoin, other digital currencies, and their related technology (Blockchain), is steadily increasing. This issue has caused many people to become familiar with these currencies, participate in speculative investments and do business transactions with them. This phenomenon has been noticed not only by individuals but also by government institutions. In some cases, governments have even made commercial investments in the field while trying to establish a regulatory framework. However, before creating a legal framework, the most important thing is to know their legal nature in the legal system; Because their nature will underlie any legal framework. Therefore, in this research, we will examine this important issue.
Examining the different legal systems and considering the possible natures, we find that there are eight possible natures for Bitcoin. To determine the nature of Bitcoin, we check the compatibility of the characteristics of these natures with the characteristics of Bitcoin. These investigations found that while Bitcoin has some characteristics of each of these eight natures, none are suitable for Bitcoin, And the properties of Bitcoin cannot be fully matched to any of these natures. Therefore, a new nature should be created for Bitcoin and its likes to have all the features of this emerging phenomenon and express all aspects of its nature. Therefore, in this research, following the model of the Russian legal system, a new nature has been given to this phenomenon, which we call digital financial assets.
"Financial asset" is a new legal term used for the first time in the Russian legal system for this emerging phenomenon. This concept is expressed with another term, such as virtual assets, in the 4 FATF guidelines related to this topic. The point is that the legal systems correctly recognizing this phenomenon have given it a new nature, And they refer to it with definitions such as financial assets, digital financial assets, or virtual assets. All these expressions imply a specific concept, But the remarkable thing is that all these legal systems have considered it an asset.
Finally, we suggest that the legislative assemblies of countries take an essential step towards understanding the legal nature of this phenomenon for people, judges, lawyers, economists, and other stakeholders by identifying a new nature for this phenomenon, such as a digital financial asset that includes all its dimensions. This issue can solve many problems in this field.
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