Research is Underway on Regulating New Digital Currencies
The first research project for the Law Foundation’s $2m Information Law and Policy Project (ILAPP)* is already underway. It is titled “Regulating Digital Currencies that use Blockchain Technology” and it deals with one of the most game-changing and challenging technology innovations in the world of business and finance.
You may have heard of Bitcoin, the virtual or “crypto-currency” that can be used to pay directly for goods and services, bypassing banks and credit cards. The Bitcoin is just one of hundreds of different digital currencies that use “blockchain” technology.
University of Auckland Business School Associate Professor Alexandra Sims is the lead researcher for this project. She says digital currencies are poised to revolutionise the finance world and beyond, and this poses challenges for lawmakers and regulators around the world.
Blockchain technology and its uses are still evolving, and its progress has been speculative and volatile. Crypto-currency values have fluctuated wildly, creating big winners and losers.
Although Bitcoin misuse has been reported since its introduction in 2008, Alexandra believes that doesn’t mean we should not use it. She says crypto-currencies can be more traceable than cash.
Alexandra and her co-researchers Professor David Mayes, of the University of Auckland, and Dr Kanchana Kariyawasam, of Australia’s Griffith University Business School, aim to develop a legal framework for blockchain regulation in New Zealand and Australia.
“We want to ensure the utmost balance between the interests of blockchain stakeholders and the interests of regulators,” she says. “Harmonising Trans-Tasman approaches will improve finance industry stability and regional infrastructure.”
Like all Law Foundation-backed projects, the blockchain technology research is independent. Another strength is that the team is interdisciplinary, combining expertise in law, banking, finance and economics – it is a requirement that all the Foundation’s ILAPP projects are interdisciplinary.
The Law Foundation has granted up to $52,467 towards research for this project.
* Launched on 23 August 2016, the Law Foundation’s new Information Law and Policy Project (ILAPP) provides an independent $2 million fund to develop law and policy around IT, data, information and cyber-security.