The Economic and Regulatory Challenges of Decentralized Digital Money: An Analytical Study of Bitcoin

Abstract

This research paper aims to shed light on the economic and legal reality of electronic and virtual money and the most significant problems facing their adoption. The study concludes that virtual currencies are conceptually distinct from electronic money, and that despite the capacity of virtual currencies to perform the classical functions of money, they continue to suffer from pivotal unresolved issues such as legal recognition and legitimacy, and repeated incidents of theft and fraud. Consequently, economic and technical research on this type of money needs to be intensified in order to identify the principal obstacles to, and requirements for, its adoption.