Crypto Legal is the legal use, view and mandate of cryptocurrencies. Opinions are expressed by important banks in the world of major countries that control the economy of the world. They express the good and bad of what cryptocurrencies have to offer as a future legal tender.
Currently, cryptocurrencies are just known to be an additional form of payment for goods and services or for transactions but the actual aspect being an acceptable currency all over the world is yet to be made certain. In this category, you have an understanding of how banks perceive cryptocurrencies and how they will have an effect on the economy of the world if used as a legal tender and the impact on traditional banks.
It is a virtual money and not a fiat money; so, what happens when we start making use of virtual money for all our transactions, exchanges and trade? Several crypto legal platforms have been reviewed with their respective pros and cons on the use of cryptocurrencies in this category on Cryptolinks, they include;
1. ECB – What is Bitcoin?
2. ECB – Virtual or Virtueless
3. ECB – Legal Working Paper
4. ECB – Virtual Currency Schemes
5. US Treasury – Virtual Currencies
6. Digital Currencies: 5 reasons we’re calling for information
7. Bitcoin as Money?
8. On Bitcoin and Red Balloons
9. Blockchain at Berkley
10. Distributed Ledger Technology: Beyond Blockchain.
All these 10 crypto legal platforms considered certain factors or limits and some features were also used while justifying the use of Bitcoin as a legal tender all over the world and these include;
1. Backing and Not a General Mode of Payment
Bitcoin or any other form of cryptocurrency is not backed by any central public authority i.e. you can’t hold it as a physical asset and expect it to be acceptable everywhere in the world. Bitcoin is regarded by them as virtual but as a currency that ensures your right to use it anywhere in the world or keep its value stable, no.
Unlike fiat money, you are protected in such a way that you can attest to how your money was spent or used but for cryptocurrencies, you are not always protected. You always have to improve the security level of your wallet or else it becomes vulnerable for hackers to steal. Hence, Bitcoin or any other form of cryptocurrencies does not have a legal protection.
Volatility involves the instability of an asset; with the change in market conditions and prices, it can be said that Bitcoin or cryptocurrencies generally are too volatile i.e. they are not stable. The price of Bitcoin today could be different from what it will be tomorrow and fiat money isn’t like that. So, it is either you buy more or less.
A layman knows what they use fiat money to do because it is a form of exchange but with the use of Bitcoin or cryptocurrencies, it could be very difficult to achieve the main purpose of being a currency for exchange. Literates could still cope with understanding how it works but where do you leave the illiterates that don’t that have an expertise in the use of modern tech, talk-less of virtual currency. They definitely fall into the category of people that believe it is a scam rather than a solution.
To settle this fact, these legal platforms or banks settled the argument based on the fact that Bitcoin or cryptocurrency is virtual but not a currency; rather, a speculative asset. They believe they have no right to ban or regulate the crypto because it is based on customer’s opinion and readiness to take the risk. However, since they reported it to lack consumer protection, they often advise users of cryptocurrencies to exercise caution.
Also, most of these banks or platforms believe cryptocurrencies are subject to improve in their quality that would most likely be the reason why they would be acceptable all over the world as a legal tender. They support the fact that they could be used to make donations but with extreme caution.
As often said, cryptocurrencies could rule the world and become the future of money only if they overcome these limits stated by banks or platforms. Some of these crypto legal arguments have provided materials and videos to buttress their points which is a good thing but there are still some disagreements between them; for instance, while some support the fact that Bitcoin could be a relief for the future, others still believe there will be an adverse effect in the financial system.