“Regulation of Cryptocurrencies:
The Theory-Practice Nexus”
Controlling Cryptocurrencies, University of Birmingham, 12th June 2015
IMMACULATE D. MOTSI-OMOIJIADE
UNIVERSITY OF WARWICK
PhD Student; LLM; MPP
Agenda
• Cryptocurrency Risk Profile
Why?
• Role of Regulation
• What are the options?
How?
• How has this been applied in practice?
• Regulatory Functions and Resources
Who?
• An open-source regulatory model
Why?
Why?
“Regulation is an
existential threat for
Bitcoin because it can
only compete
effectively if it remains
an unregulated asset
class”
Izabella Kaminska,
(Financial Times)
Why?
“Nearly all government
regulations are
damaging to business…
(but) no words
written on a piece of
paper by politicians ca
n alter the way the
(Bitcoin) protocol works
”
Roger Ver
(PanAmPost)
Why?
“As a portfolio manage
r, when do you start
advising to your clients
that they have some
cryptocurrency
exposure?”
Melanie Swan
(Fortune Magazine)
Why?
“Without Government
intervention…banks
are not likely to provid
e digital currency
businesses with
support”
Why?
“The absence of clear
regulatory guidelines
creates uncertainty in
this space, and
prevents legitimate
players from entering
the space.”
Why?
“Regulation is often thought of as an activi
ty that restricts behaviour and prevents the
occurrence of certain undesirable activities
(the ‘red light’ concept). However, the
activities of regulation may also be enablin
g and facilitative (the ‘green light’ concept)
”
Harlow, C and Rawlings, R (2009)
How?
‘Return of the
‘Command and
State’; Limitations
Control’
of Self-Regulation;
Meta-Regulation;
‘Better Regulation’
How?
“Sunshine
Regulation”/
Laissez-faire
“Enforcement-
“Command and
Based”
Control”
How?
Who?
Regulators (Prudential and Conduct)
Miners (Bitcoin ‘Generators’)
Retailers & Consumers
Investment Banks & Investors
Exchanges & Money Transmitters
Consultancy Firms & Interest Groups
Supra-National Agencies
Who?
Information Gathering
Functions
Which Actors?
Modifying Behavior
Standards Setting
Expertise; Legitimacy;
Resources
Information; Position;
Finances; Capacity
Who?
Open-Source Regulatory Model
• Networks and “the strength of weak ties”
• Beyond “seeking comment”
• Use of blockchain technology in a form o
f “legal programming”
• Towards “technology neutral” regulation
Thank You