This work will study the legitimacy of virtual currencies through UK and Hong Kong regulations. UK and Hong Kong regulatory authorities have been claiming they have already covered virtual currencies and already regulating this part of the financial world. The study examines issues to assess if there is actual protection over the use of virtual currency and the possible reforms to existing virtual currency regulations.
Virtual currency is digital currency, that exists in electronic form. Virtual currency can only be stored and processed through designated software, mobile devices, computer applications or a dedicated digital wallet, and transactions are made over a secure, private network via the Internet. Virtual currencies are not authorized by the central bank.
Technology has been driving the financial world, and a successful example is the increasing acceptance of electronic payments, which is also form of digital currency. Virtual currencies, such as Bitcoin, are becoming increasingly popular. PricewaterhouseCoopers estimated that about 150 active crypto hedge funds that invest in virtual currencies and currently manage approximately $ 1 billion in assets and this number does not include crypto index funds and crypto venture capital funds (making equity type investments). According to the report, crypto hedge funds were able to double their AUM in 2018, and the AUM of crypto hedge funds increased from $ 2.1 million in January 2018 to $ 4.3 million at the end of the first quarter of 2019.
Contrast to virtual currencies, electronic payment is widely accepted and now plays an important role in the daily transactions of individuals, companies and society. This is an example how the financial innovation has been developing and benefit the society. Financial innovation has the potential to create jobs and economic activities, improve efficiency and reduce settlement costs. With the healthy development of the industry, together with the development of virtual currencies, proper evaluation on the legitimacy of virtual currencies through careful research and supervision is a more constructive measure for virtual currencies.
Inhaltsverzeichnis (Table of Contents)
- Abstract
- Introduction
- Introduction
- Aim, purpose and goal
- Virtual Currency and digital currency
- What is virtual currency
- What is Digital currency
- Cryptocurrencies
- The difference between digital, virtual and cryptocurrencies
- Focus of this paper
- Legislation Development on Virtual Currency in the United Kingdom
- Statute
- Supernational Level
- Domestic level
- Rules and regulations
- Domestic level
- Regulatory bodies
- Supernational Level
- Domestic level
- Current status and recent development
- Legal status in statutes
- Legal status in recent case law and opinion from the UK Jurisdiction Taskforce
- The issue met by the regulators
- Lack of direct regulatory regimes applicable to virtual currencies
- Insufficient regulations on virtual currencies service providers
- Brexit
- Statute
- Report from UK Crypto Assets Taskforce
- The Task Force
- The Final Report: brief
- Recommendations
- Development
- Report from UK Jurisdiction Taskforce
- Task Force
- The Final Report: brief
- Recommendations
- Development
- Recommendation
- Framework of the recommendation
- Offering Crypto Assets
- 'appropriate disclosure requirements on public offerings of crypto assets'
- Trading Crypto Assets
- Governance requirements of platform operators, including prudential requirements
- Requirements for accessing the platform
- Requirements for the robustness, flexibility and integrity of the operating systems
- Market integrity requirements
- Transparency requirements
- AML/CFT requirements
- Tradable products in the platform
- Storage
- Impact of liquidation and settlement
- Custody of Crypto Assets
- Private key protection and key lifecycle management control
- Reporting and prudential regulatory requirements
- Exposure to Crypto Assets
- Minimum requirement recommended by Basel Committee on Banking Supervision
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This work examines the legitimacy of virtual currencies within the regulatory frameworks of the United Kingdom and Hong Kong. It explores whether existing regulations offer sufficient protection for users of virtual currency and investigates potential reforms to strengthen those regulations. The study aims to assess the current state of virtual currency regulation and highlight areas for improvement.
- The legal status of virtual currencies in the UK and Hong Kong
- The challenges of regulating virtual currencies, including the lack of clear regulatory regimes and insufficient regulation of service providers
- The role of regulatory bodies in the development of virtual currency regulation
- Recommendations for enhancing the regulation of virtual currencies, focusing on areas like public offerings, trading platforms, custody, and exposure
- The potential impact of Brexit on virtual currency regulation
Zusammenfassung der Kapitel (Chapter Summaries)
- Chapter 1: This chapter provides a general overview of virtual currencies, defining their nature and highlighting their increasing popularity. It also emphasizes the importance of careful research and supervision to ensure their legitimate development.
- Chapter 2: This chapter introduces the research project, outlining its aim, purpose, and goals. It sets the stage for the comprehensive examination of virtual currency regulation in the UK.
- Chapter 3: This chapter delves deeper into the definitions of virtual currency, digital currency, and cryptocurrencies, explaining their distinctions and establishing a foundational understanding of these terms.
- Chapter 4: This chapter explores the development of legislation on virtual currencies in the UK. It analyzes statutes, rules, regulations, and regulatory bodies at both supernational and domestic levels. It also examines the current legal status and recent developments in the field, including case law and opinions from the UK Jurisdiction Taskforce.
- Chapter 5: This chapter reports on the findings of the UK Crypto Assets Taskforce. It provides a brief summary of the Task Force's final report, its recommendations, and the subsequent developments in the field.
- Chapter 6: This chapter focuses on the report from the UK Jurisdiction Taskforce. It discusses the Task Force, its final report, its recommendations, and the subsequent developments.
- Chapter 7: This chapter presents recommendations for a comprehensive framework for regulating virtual currencies in the UK. The recommendations cover various aspects, including public offerings, trading platforms, custody, and exposure to crypto assets.
Schlüsselwörter (Keywords)
This work focuses on the regulation of virtual currencies, particularly in the UK. Key terms and concepts include virtual currency, digital currency, cryptocurrencies, legislation, regulation, regulatory bodies, Taskforces, public offerings, trading platforms, custody, exposure, Brexit, and the legal status of virtual currencies.
- Citation du texte
- Ben Tong (Auteur), 2020, Developments in UK law on the regulation of virtual currency, Munich, GRIN Verlag, https://www.grin.com/document/912541
