“Legal Aspects of Cryptocurrency Trading: Between Financial Liberalization and Threat to Economic Stability”

Abstract

This thesis examines the legality behind the use and trading of cryptocurrencies and various countries attempts to bring them under regulation. The emergence of cryptocurrencies such as Bitcoin is transforming the way individuals view money, yet it generates numerous legal and monetary issues. The study examines how various jurisdictions, such as Saudi Arabia, the United States, the United Kingdom, China, El Salvador, and the European Union, have developed unique rules on handling cryptocurrencies. There are states in which open policies have permitted crypto, whereas other states have criminalized or banned it to a certain extent. The study refers to cryptocurrencies' most significant threats, including their highly volatile prices, employment in financing illicit activities, and the danger of controlling a nation's currency. It further presents the issue of regulating crypto worldwide, given that the law cannot keep up with the pace of technology. A proposal for a more effective legal framework is one of the essential components of the paper. This involves more precise definitions of what a crypto-asset is, more co-operation between countries, ensuring more user protection, and rules that remain flexible, but still enable emerging technologies to flourish. The paper also discusses the central bank digital currencies (CBDCs) and their differences from cryptocurrencies. The thesis proposes that nations collaborate to establish straightforward, equitable, and efficient regulations that govern crypto threats in a manner that enables innovation.