Diese Präsentation wurde erfolgreich gemeldet.
Wir verwenden Ihre LinkedIn Profilangaben und Informationen zu Ihren Aktivitäten, um Anzeigen zu personalisieren und Ihnen relevantere Inhalte anzuzeigen. Sie können Ihre Anzeigeneinstellungen jederzeit ändern.

20190316 - CLBFest - Virtual Currencies - Niels Vandezande

299 Aufrufe

Veröffentlicht am

Niels Vandezande (https://twitter.com/NielsVandezande), from the niche law firm Time.lex discussed virtual currencies

- What was the payment landscape when bitcoin started out (2008/2009) v what is it now?
- What is bitcoin's place in the payment landscape?
- What are alternatives (for the underbanked)?
- What is money?
- Does the e-money directive apply to virtual currencies? in principle, no
- Does the payment services directive apply to virtual currencies (services)? in principle, no

The context was the second (2019) edition of the Computational Law and Blockchain Festival (#CLBFest), Brussels' node.

Veröffentlicht in: Bildung
  • Als Erste(r) kommentieren

20190316 - CLBFest - Virtual Currencies - Niels Vandezande

  1. 1. CL+B FEST 2019 16 March 2019 Dr. Niels Vandezande VIRTUAL CURRENCIES, A VIABLE TRANSFER OF VALUE?
  2. 2. CRYPTOCURRENCIES 2
  3. 3. • 2008: Bitcoin white paper Satoshi Nakamoto • First blockchain use case • 2009: genesis block • 2010: First physical transaction • 2 pizza’s @ BTC 10.000 • 2011: parity with USD • 2013: first hype -> BTC 1 > USD 1.000 • 2014-2016: relative stability around USD 500 • 2017: second hype -> BTC 1 = USD 20.000 • 2018-2019: going down (BTC 1 around USD 4.000) 3 BITCOIN
  4. 4. 4 BITCOIN AND CRYPTOCURRENCIES • Other cryptocurrencies: • Often imitations of bitcoin, but could also serve other purposes: Ethereum • -> issue of network economics • Bitcoin forks: seceding from the bitcoin blockchain • Bitcoin Cash • Bitcoin Gold • Bitcoin Private • Scalability issues • Bitcoin can only process limited amount of transactions (4/s versus 25k/s Visa) • consequence: confirmation delays and high transaction costs
  5. 5. PAYMENTS LANDSCAPE 5
  6. 6. • No payment apps • App Store only launched in 2008 • Slow processing time • Often several working days • High transaction fees • Due to many parties involved in a typical transaction • Network costs • Particularly expensive before wider adoption of broadband • Financial crisis • Trust in financial system undermined 6 PAYMENTS LANDSCAPE: SITUATION AT 2008
  7. 7. 7 PAYMENTS LANDSCAPE: ACTORS
  8. 8. 8 PAYMENTS LANDSCAPE: ACTORS By Dyah N.K. Makhijani (2006) “An Introduction of Payment Systems”, https://www.bi.go.id/en/sistem- pembayaran/edukasi/Documents/1fe856cd22d04b9abfd4 4ab050545fefAnIntroductiononPaymentSystem.pdf.
  9. 9. 9 PAYMENTS LANDSCAPE: ACTORS
  10. 10. 10 PAYMENTS LANDSCAPE: COSTS Accourt (2016) “Bank charges on international payments An analysis of the UK SME market”, report for MoneyMovers.
  11. 11. • Swift payments • Cheap payments • No reliance on intermediaries • Anonymity • Good for underbanked • No seizure or theft • No taxes • No chargebacks 11 PAYMENTS LANDSCAPE: PROMISES OF BITCOIN
  12. 12. • Swift payments • Bottleneck due to scaling problem • Cheap payments • High transaction fees due to scaling problem • No reliance on intermediaries • Plethora of intermediaries mimicking traditional intermediaries • Anonymity • Not that hard to identify person behind the transaction 12 PAYMENTS LANDSCAPE: PROMISES OF BITCOIN
  13. 13. • Good for underbanked • No reliance on banks, but also alternatives • No seizure or theft • Keys can be seized or stolen • No taxes • False, can be subjected to VAT and capital gains tax • No chargebacks • But non-revocation can also be a bad thing 13 PAYMENTS LANDSCAPE: PROMISES OF BITCOIN
  14. 14. • Benefits: who mines a block receives new units of bitcoin (12,5 anno 2018) • Costs: • Equipment: specialized ASIC-miners required • Electricity: every transaction uses about as much electricity as a median household per month • Data: bitcoin blockchain > 170GB 14 BITCOIN: COSTS AND BENEFITS By Marco Krohn (Own work) [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons
  15. 15. 15 BITCOIN: TRANSACTION COSTS
  16. 16. 16 BITCOIN: INTERMEDIARIES
  17. 17. UNDERBANKED 17
  18. 18. M-Pesa • Mobile phone money transfer • Available in Kenya, Tanzania, Afghanistan, South Africa, India, Romania (and Albania) • Allows users to deposit, withdraw, transfer money and pay for goods and services • Using account on mobile phone, operated by telecom provider 18 ALTERNATIVES FOR UNDERBANKED
  19. 19. 19 ALTERNATIVES FOR UNDERBANKED
  20. 20. 20 ALTERNATIVES FOR UNDERBANKED
  21. 21. MONEY: THEORIES AND ORIGINS 21
  22. 22. • Assets used to conclude payments? • But: there is also money that doesn’t serve as means of payment • And means of payment that aren’t money • UCC: a medium of exchange currently authorized or adopted by a domestic or foreign government • In part refers to legal tender • Black’s Law Dictionary: generally accepted medium of exchange – often with the status of legal tender – that represents purchasing power, or assets that can be easily converted into cash • First part: legal tender • Second part: but also not legal tender (see M1 and M2) MONEY: DEFINITION 22
  23. 23. • State theory: State determines means of payment, unit of account and denominations -> Not just legal tender, but what is accepted by State • Societal theory: what has confidence of the people and is used in commerce • Functions: medium of exchange, unit of account, store of value 23 MONEY: ECONOMIC THEORIES
  24. 24. • Popular opinion: bartering theory • Money was created to solve the issues of bartering • However: • no perfect bartering society ever existed • Money as unit of account came before physical circulation • First money: money as credit • Oldest law codes noted debts in weights of silver (even before 2000 B.C.) • However, that silver did not circulate, it only serves as common unit of account to settle debts • See also Yap stones: stone served as money, but did not have to circulate • => centralized or even decentralized ledgers! • Next step: money as physical unit • First coins found in Lydia (700 B.C.) 24 MONEY: ORIGINS By Bartek.cieslak (Own work) [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons
  25. 25. E-MONEY AND PAYMENT SERVICES 25
  26. 26. E-MONEY: SECOND DIRECTIVE (2009/110/EC) • E-money • Definition refined (see next slide) • E-money institutions • Lighter regime (no longer credit institutions, but still no deposit-taking) • Operational requirements: EUR 350k initial capital, own funds rules • Prudential rules: see PSD • Broader activities (limited credit-granting relating to payment services) • Safeguarding requirements • Waivers and redeemability maintained • Review: should have coincided with review PSD 26
  27. 27. E-MONEY: SCOPE • Electronically, including magnetically, stored value • Technology neutral • Funds must be available to bearer • Represented by a claim on the issuer • Question of ownership • Reimbursement -> redeemability • Issued on receipt of funds • Protection against over-issuing (though EMD1 failed here) • Creation of new units must correspond to funds received hereto (prepaid) • Accepted by institutions other than their issuer • Distinction from single- or limited-purpose instruments • See limited network scope exemption 27
  28. 28. PAYMENT SERVICES: SECOND DIRECTIVE (2015/2366) • Scope: addition of third parties, tightening of scope exemptions • Authorization and operational requirements largely the same • Tighter rules regarding execution of transactions (e.g. focus on strong user authentication, limitation of payer’s liability for unauthorized transactions to EUR 50) • Quid EMD2? • Applicable since January 2018 28
  29. 29. PAYMENT SERVICES: SCOPE • Provision of payment services as main business • Funds: could include VC, though not universally accepted • Focus on payment accounts • Services: • Cash withdrawal and placement • Transactions funded by payment account or credit line • Issuing payment instruments • Money remittance (cash-based, without account) • Payment initiation and account information services 29
  30. 30. PAYMENT SERVICES: SCOPE EXEMPTIONS • Cash transactions, document-based transactions, cash transport, etc. • Technical service providers • Added value exemption • Those not acting as mere intermediary are exempted • PSD2: more clearly limited to electronic communications services and for limited value • Limited networks exemption • Services within limited network or limited range of goods/services exempted • PSD2: limited network around issuer, limited range of goods/services, services limited to one MS for social or tax purposes • Money exchange exemption • Only covers cash-to-cash operations 30
  31. 31. VIRTUAL CURRENCIES: E-MONEY? • Closed scheme virtual currencies • No exchange between VC and legal tender -> no e-money • Unidirectional scheme virtual currencies • Could theoretically fulfill all criteria • However: differentiation needed in practice • Bidirectional scheme virtual currencies • Also here: possible in theory, need for differentiation in practice • E.g. cryptocurrencies: issuing (in the sense of creation) controlled by algorithm, not by receipt of funds • E.g. Second Life Linden dollar: can only be used in Second Life 31
  32. 32. VIRTUAL CURRENCIES: PAYMENT SERVICES? • Closed scheme and unidirectional scheme virtual currencies • Not included under scope (and would benefit from scope exemption anyway) • Bidirectional scheme virtual currencies • Scope exemption could apply to services with limited acceptance • Differences between MS: FR and LU in favor of inclusion; BE, DE and UK not • However: also here case-by-case approach needed • Consequence: if EMD2 and PSD2 cannot be applied -> resort to regular contract law 32
  33. 33. VIRTUAL CURRENCIES: LICENSED SERVICE PROVIDERS? • Several cases in BE, LU and UK of virtual currency service providers being licensed • Need to distinguish between what the license is for and what not • Positive development • Could help foster trust • Can be competitive advantage • Could lead to transitory measures • Negative development • Divergence between MS does not facilitate harmonization of this framework -> passporting? • False perception of trustworthiness of other service providers • Burden for market entrants 33
  34. 34. CONCLUSIONS 34
  35. 35. CRYPTOCURRENCIES: APPLICABILITY CURRENT LAW • Can we apply some of the current frameworks in EU financial law? • E-money and payment services: principally not applicable • Can we make these frameworks applicable? • E-money and payment services: e-money is in need of overhaul, list of payment services can be extended
  36. 36. • No legal tender: can be accepted at own risk, but not mandatory • User: bears the risk of loss, theft, value fluctuations, etc. • Service provider: • No payment service of e-money: so no license required • but: could be coupled to offering payment services (e.g. Circle) • ->need to investigate whether other services offered are bound to license duty 36 CRYPTOCURRENCIES IN PRACTICE
  37. 37. • What if also a payment service is offered? • Apply for license at competent regulator • Prudential requirements • Capital requirements (between 20k and 120k, depending on service) • Documentation and accounting • Processing of personal data (limited and with explicit consent) • AML rules also applicable! 37 CRYPTOCURRENCIES IN PRACTICE
  38. 38. • Main opportunities? • Global remittance: migrants send over USD 600 billion home per year • Blockchain technology: so much more than cryptocurrencies • Trading and interbanking: could be used in trade finance • For merchants: first-mover advantage? But also risks! • But: we need to fix some things • Today, bitcoin is not a viable means of payment • Technical, governance and legal issues to be tackled 38 CRYPTOCURRENCIES IN PRACTICE
  39. 39. ANY QUESTIONS? Dr. Niels Vandezande Legal Consultant @ Timelex Research Fellow @ KU Leuven CiTiP niels.vandezande@timelex.eu www.timelex.eu be.linkedin.com/in/nvandezande twitter.com/nielsvandezande 39

×