Bitcoin: The nexus between regulation and recognition

Uyumaz, Alper and Woldemaryam, Enku Tensay (2023) Bitcoin: The nexus between regulation and recognition. ACTA OECONOMICA, 73 (4). pp. 579-589. ISSN 0001-6373

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Abstract

The article analyses the current issues contributing to the volatility of Bitcoin as the reliability of this new technology diminishes, leading to increased unpredictability of its value. Legal efforts and literature regarding Bitcoin have primarily focused on protecting society from the illegal use of this digital technology, with little emphasis on integrating it as an asset. However, this article proposes that countries adopt Bitcoin-related legislation, incorporating recognition and regulation clauses to transform Bitcoin into a stable, less volatile and functional digital asset. In the context of legal history, primary legal domains, such as contracts, family, trade and others, have been integrated through recognition and regulation processes. Therefore, we argue that adopting Bitcoin-specific legislation that recognizes this new technology while comprehensively regulating the associated risks would enhance the coin's stability and reduce volatility, ultimately increasing trust among digital investors and users.

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