Attentive look at the legal aspects in the development of cryptocurrencies and Blockchain

Cryptocurrencies and Blockchain technology are in vogue. Increasingly, we are talking about how cryptocurrencies are changing the financial environment and how Blockchain technology is allowing the emergence of innovations in different industries (health, construction, transport, etc.).

Definitely, These changes will affect the lawyers, who are the legal advisers of the different businesses that are decided to undertake, many of which will be based on Blockchain technology.

The latter leads to disturbing questions such as what legal problems may arise from the use of Blockchain technology or cryptocurrencies, what uses can be given in the provision of legal services, among others. Even the state of development of all this new technology is incipient to know the final impact it will have in the legal field.

Some of the areas where this technology would impact are the financial regulatory and monetary policy. Cryptocurrencies such as bitcoin are already accepted as a means of payment in some stores. This means that people are buying products and services by paying with bitcoins or another cryptocurrency. As indicated by senior officials of the Central Reserve Bank of Peru (BCRP), depending on the evolution in the use of cryptocurrencies, their use could generate macroeconomic instability, but, on the other hand, the Blockchain technology could serve to "Renew the current infrastructure of the payment system and, eventually, the possibility of issuing its fiduciary currencies in digital form directly to the public"[1].

To this we must add that bitcoins are also characterized by having a system that does not need the registration of personal data, which makes it difficult to identify the people who carry out transactions with this cryptocurrency; this could lead to risks of money laundering and terrorist financing (LA / FT), which would ultimately merit some regulation in terms of prevention of ML / TF.

There is no doubt that we are at the beginning of a digital revolution that will change many of the ways in which we interact and record information. The cryptocurrencies and the Blockchain are enabling us to flex and reduce transaction costs in commercial activities that were previously only controlled by a few.

However, like all innovation, this digital revolution is not without obstacles. As we have pointed out, there are aspects of this system that are not yet clearly defined or that are capable of generating losses. This is enough for those who exercise the right (lawyers and academics) to be aware of the changes in society as a result of the development of this technology, but without forgetting that it is necessary to give it a sufficient space so that it can be developed without compromising the interests of those that make their existence possible.

[1] Morán, Marthín; Pérez, Fernando; Ortiz, Marco and Paul Castillo. Digital coins A perspective from the central bank.In: Currency Magazine, No. 173, March, 2018, p. 29

*Published for the first time in https://vodanovic.pe/mirada-atenta-a-los-aspectos-legales-en-el-desarrollo-de-las-criptomonedas-y-del-blockchain/

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Adolfo Morán
Adolfo is Founder and Executive Director of Lawgic Tec, a nonprofit association dedicated to research on issues of law and new technologies. General Editor of The Crypto Legal web platform and Legal Consultant in the Financial Regulation and FinTech area of ​​EY Law. He specializes in Blockchain, Smart contracts and Fintech. Email: contacto@lawgictec.org

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