The Rise of Cryptocurrency and Its Regulation

Oct 13, 2025 by leolavanderia.com.br 112 views

Introduction

The emergence of cryptocurrency has brought about a new phenomenon in the digital world, attracting significant attention in the discussion of international and domestic law. As its use becomes increasingly widespread, cryptocurrency poses potential significant impacts, making its regulation in the framework of international law a complex problem. One of the main challenges is the variety of legal approaches taken by countries related to the legal status and cryptocurrency regulation in each country. This article aims to explore the international legal framework governing cryptocurrency and various strategies implemented by countries to face this phenomenon.

The Rise of Cryptocurrency and Its Regulation

Cryptocurrency is a digital or virtual currency that uses cryptography for security and is decentralized, meaning it is not controlled by any government or financial institution. With its increasing popularity, cryptocurrency has become a topic of interest for governments, financial institutions, and individuals. However, its regulation remains a complex issue, with different countries taking varying approaches. Some countries, such as Indonesia and Canada, recognize cryptocurrency as an asset or commodity that can be traded. On the other hand, El Salvador has adopted cryptocurrency as a valid currency and payment tool. However, there are also countries that reject the existence of cryptocurrency, both as trade assets and as a means of payment and currency, such as China.

International Legal Framework Governing Cryptocurrency

The international legal framework governing cryptocurrency is still evolving, and there is no clear consensus on its regulation. The United Nations has issued guidelines on the regulation of cryptocurrency, emphasizing the need for countries to develop their own regulatory frameworks. The Financial Action Task Force (FATF) has also issued recommendations on the regulation of virtual assets, including cryptocurrency. However, the implementation of these guidelines and recommendations varies from country to country.

Country-Specific Approaches to Cryptocurrency Regulation

Different countries have taken varying approaches to regulating cryptocurrency. Some countries have established clear regulatory frameworks, while others have taken a more relaxed approach. For example:

Indonesia: Indonesia has recognized cryptocurrency as a commodity and has established a regulatory framework for its trading.
Canada: Canada has also recognized cryptocurrency as a commodity and has established a regulatory framework for its trading.
El Salvador: El Salvador has adopted cryptocurrency as a valid currency and payment tool.
China: China has rejected the existence of cryptocurrency, both as trade assets and as a means of payment and currency.

Research Methods

This study uses juridical normative research methods that focus on the study of legal norms in international law related to cryptocurrency. This approach begins with a deductive analysis of the articles governing certain issues in regulations. This study also uses relevant secondary library sources or secondary data. With its normative nature, this study aims to understand the relationship between regulations and their applications in legal practice.

Findings and Implications

The results of this study are expected to provide in-depth insights on the development of cryptocurrency regulations, as well as the implications of related international and domestic law. This study also aims to provide a better basis in understanding the challenges and opportunities faced in the cryptocurrency regulation in the future.

Conclusion

By understanding the international law framework and various approaches taken by countries, we can see how cryptocurrency regulations will continue to develop. Different approaches reflect the specific situations and needs of each country, and this needs to be considered in an effort to create a balanced and effective regulation. In a global context that continues to change, it is essential for countries to collaborate and share information to create a better legal framework for cryptocurrency, which in turn will bring benefits to the global economy.

Recommendations

Based on the findings of this study, the following recommendations are made:

Countries should establish clear regulatory frameworks: Countries should establish clear regulatory frameworks for cryptocurrency trading and use.
International cooperation is essential: International cooperation is essential for creating a better legal framework for cryptocurrency.
Regulations should be balanced and effective: Regulations should be balanced and effective, taking into account the specific situations and needs of each country.

Future Research Directions

This study has provided insights into the international legal framework governing cryptocurrency and various strategies implemented by countries to face this phenomenon. However, there are still many areas that require further research, including:

The impact of cryptocurrency on the global economy: The impact of cryptocurrency on the global economy is still unclear, and further research is needed to understand its effects.
The regulation of cryptocurrency in developing countries: The regulation of cryptocurrency in developing countries is still a complex issue, and further research is needed to understand the challenges and opportunities faced by these countries.
The role of international organizations in regulating cryptocurrency: The role of international organizations in regulating cryptocurrency is still unclear, and further research is needed to understand their impact on the development of cryptocurrency regulations.
Cryptocurrency Arrangements within the Framework of International Law and Approaches in Various Countries: Q&A =============================================================================================

Q: What is cryptocurrency, and how does it work?

A: Cryptocurrency is a digital or virtual currency that uses cryptography for security and is decentralized, meaning it is not controlled by any government or financial institution. It works by using a decentralized ledger called a blockchain to record transactions, which are verified by a network of computers around the world.

Q: What are the benefits of using cryptocurrency?

A: The benefits of using cryptocurrency include:

Decentralization: Cryptocurrency is not controlled by any government or financial institution, making it a more decentralized and secure form of currency.
Security: Cryptocurrency uses advanced cryptography to secure transactions and protect users' identities.
Speed: Cryptocurrency transactions are typically faster than traditional bank transfers.
Low fees: Cryptocurrency transactions often have lower fees than traditional bank transfers.

Q: What are the challenges of regulating cryptocurrency?

A: The challenges of regulating cryptocurrency include:

Lack of clear guidelines: There is currently a lack of clear guidelines on how to regulate cryptocurrency, making it difficult for governments and financial institutions to develop effective regulations.
Decentralization: Cryptocurrency is decentralized, making it difficult for governments and financial institutions to control and regulate.
Security risks: Cryptocurrency is vulnerable to security risks, such as hacking and cyber attacks.

Q: How do countries regulate cryptocurrency?

A: Countries regulate cryptocurrency in different ways, including:

Recognizing cryptocurrency as a commodity: Some countries, such as Indonesia and Canada, recognize cryptocurrency as a commodity and have established regulatory frameworks for its trading.
Rejecting the existence of cryptocurrency: Some countries, such as China, reject the existence of cryptocurrency, both as trade assets and as a means of payment and currency.
Establishing clear regulatory frameworks: Some countries, such as El Salvador, have established clear regulatory frameworks for cryptocurrency trading and use.

Q: What is the role of international organizations in regulating cryptocurrency?

A: International organizations, such as the United Nations and the Financial Action Task Force (FATF), play a crucial role in regulating cryptocurrency. They provide guidelines and recommendations on how to regulate cryptocurrency, and they work with countries to develop effective regulations.

Q: What are the implications of cryptocurrency regulation for the global economy?

A: The implications of cryptocurrency regulation for the global economy are still unclear, but it is expected to have a significant impact. Cryptocurrency has the potential to disrupt traditional financial systems and create new opportunities for economic growth and development.

Q: What are the future research directions for cryptocurrency regulation?

A: The future research directions for cryptocurrency regulation include:

The impact of cryptocurrency on the global economy: Further research is needed to understand the impact of cryptocurrency on the global economy.
The regulation of cryptocurrency in developing countries: Further research is needed to understand the challenges and opportunities faced by developing countries in regulating cryptocurrency.
The role of international organizations in regulating cryptocurrency: Further research is needed to understand the impact of international organizations on the development of cryptocurrency regulations.