Social Sciences in China, 2021

Vol. 42, No. 2, 2021

On the Legal Attributes of Digital Currency

(Abstract)

Yang Yanchao

Digital currency has been widely used ever since the concept of Bitcoin was formulated. It uses blockchains as its underlying technical support and is characterized by decentralization, programmability, and security verification based on the principles of cryptology. Generally speaking, theories on the legal attributes of digital currency regard it either as nonmonetaryproperty or as currency. The former theory can be subdivided into theories on digital currency as commodity, as securities or as data. All of these subdivisions present insurmountable theoretical difficulties and practical obstacles. If we return to the substantive nature of currency as a generally accepted accounting symbol, it can be seen that currency issuance by the state or a private bank is simply a means of building currency credit rather than a necessary condition. Unlike traditional currency, digital currency relies on blockchain technology to complete the construction of decentralized currency credit. This has resulted in a new theory of currency based on the theory of digital currency. On the one hand, it offers a jurisprudential foundation for the construction of the quasi-currency attributes of digital currency; on the other, it provides a theoretical basis for the gradual improvement of digital currency legislation. We can first determine the legal attributes of digital currency as a quasi-currency and then confirm its legal position when the time is ripe. We need to confirm the legal status of digital currency as a quasi-currency through legislation, and use this as a logical starting point for the construction of a series of legal systems for digital currency as a quasi-currency. Digital currency can easily be used as a tool for crime or for evading financial controls; therefore, we need to determine a regulatory body and formulate regulatory rules.

Keywords: digital currency, Bitcoin, legal attributes, regulatory system, financial regulation