| CODE | MCT5015 | ||||||||||||
| TITLE | Cryptocurrencies and the Law | ||||||||||||
| UM LEVEL | 05 - Postgraduate Modular Diploma or Degree Course | ||||||||||||
| MQF LEVEL | 7 | ||||||||||||
| ECTS CREDITS | 5 | ||||||||||||
| DEPARTMENT | Media, Communications & Technology Law | ||||||||||||
| DESCRIPTION | The rise of a new technology is often followed by regulatory concerns. This study-unit will debate and hypothesize on the framework for the regulation of distributed ledger technologies and blockchain, which is the cryptocurrency technology behind Bitcoin and Ethereum. It focuses on the legal and regulatory problems posed by the creation of a market The study-unit will kick off with an introductory seminar on how DLTs work, their (potential) uses, and their perceived benefits and challenges. This will be followed by further discrete segments on cryptocurrencies and cryptoassets, each led by a specialist in the field. The first segment will discuss regulatory strategies and in particular the challenges for States and regulators seeking to control, shape, or influence the development of DLTs/ blockchain technology, with a focus on how DLTs/ blockchain can be deployed both to support and undercut existing laws and regulations, such as those on anti-money laundering. The study-unit will also give the students the opportunity to review and examine the Malta Virtual Financial Assets Act, the financial instrument test and the role of the MFSA vis-à-vis the regulation and supervision of crypto assets. Comparisons with the initiatives in other European countries and the European Commission’s FINTECH Action plan will also be made during the course. The last discrete component of the study-unit will focus on matters relating to taxation of virtual financial assets in light of European Union direct and indirect tax principles, taking into consideration approaches by third countries, ancillary jurisprudence, as well as financial regulatory considerations applicable to issuers and investors, a space still marred with significant ambiguity. Study-Unit Aims: This study-unit aims to familiarise the students with the theory and practice of regulatory mechanisms for DLT/ blockchain-based cryptocurrencies and cryptoassets in the EU, with a special focus on Malta. It will provide an opportunity for the student to learn about the different laws and policies adopted by the Member States. It will also engage with some further comparative elements, such as with Switzerland, Japan and the US. The study-unit aims to foster an instructive debate regarding issues such as: - Impact and technological competence of regulators; - What regulatory strategy will enable governments to regulate these emergent blockchain-based systems without excessively limiting the opportunities for innovation; - The new blockchain and cryptocurrencies regulatory framework in Malta; - The categorisation of digital currencies, particularly ‘coin offerings’ in ICOs, as payment instruments, utility type with an entitlement to a right/service/product, financial instruments, or hybrids thereof; - The putative independent monetary base qualities of virtual financial assets; - An analytical comparison of crowdfunding initiatives to virtual tokens issued in fundraising transactions (initial coin offerings [ICOs] or token generation events [TGEs]); - The issuance (or mining) of tokens; - The holding or investing in such asset classes; - The exchange of the different type of tokens for fiat currency; - The use of tokens as a method of payment (or exchange) for goods and services; - Volatility in calculating the tax base reference rate for virtual financial assets. Learning Outcomes: 1. Knowledge & Understanding: By the end of the study-unit the student will be able to: - Describe what is blockchain and what are distributed ledger technologies (DLTs), their (potential) uses and their perceived benefits and challenges; - Explain the meaning of the rule of code v the rule of law, and the assumptions regarding the superiority of one or the other when it comes to freedom and autonomy; - Assess the problems from a legal and regulatory perspective (e.g. anti-money laundering (AML) and know your customer (KYC) regulations); - Examine and appraise the new blockchain and cryptocurrencies regulatory framework in Malta; - Discuss matters relating to taxation of virtual financial assets. 2. Skills: By the end of the study-unit the student will be able to: - Analyze the deployment of blockchain-based systems and carefully evaluate how to regulate the technology; - Appraise the rule of (autonomous) code v the rule of law, and the assumptions regarding the superiority of one or the other when it comes to freedom Main Text/s and any supplementary readings: Main Texts: - Girasa R., Regulation of Cryptocurrencies and Blockchain Technologies - National and International Perspectives (Palgrave 2018) [not yet available at the library] - Carr J.D., Cryptocurrencies in Public and Private Law (Oxford University Press 2019) - Haynes A., Yeoh P., Cryptocurrencies and Cryptoassets: Regulatory and Legal Issues (Routledge 2020) - Schmidt N., Bernstein J., Richter St., Zarlenga L., Taxation of Crypto Assets (Woltes Kluwer 2020) Supplementary Readings: - Financial Action Task Force, Guidance for a Risk-Based Approach: Virtual Currencies, 2015 http://www.fatf-gafi.org/media/fatf/documents/reports/Guidance-RBA-Virtual-Currencies.pdf - Financial Stability Board, Financial Stability Implications from Fintech: Supervisory and Regulatory Issues that Merit Authorities’ Attention, (2017) http://www.fsb.org/wp-content/uploads/R270617.pdf - International Organisation of Securities Commissions, IOSCO Board Communication on Concerns related to Initial Coin Offerings (ICOs). 2018 https://www.iosco.org/news/pdf/IOSCONEWS485.pdf - A. Carstens, Money in the digital age: what role for central banks?, 2018 https://www.bis.org/speeches/sp180206.htm - A. Enria, Designing a Regulatory and Supervisory Roadmap for FinTech (2018) https://www.eba.europa.eu/documents/10180/2151635/Andrea+Enria%27s+speech+on+FinTech+at+Copenhagen+Business+School+090318.pdf - C Lagarde, Central Banking and Fintech – A Brave New World (2017) http://www.imf.org/en/news/articles/2017/09/28/sp092917-central-banking-and-fintech-a-brave-new-world - C Lagarde, An even-handed Approach to Crypto-Assets (2018) https://blogs.imf.org/2018/04/16/an-even-handed-approach-to-crypto-assets/ - Y Mersch, Virtual Currencies Ante Portas (2018) https://www.ecb.europa.eu/press/key/date/2018/html/ecb.sp180514.en.html |
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| STUDY-UNIT TYPE | Lecture and Independent Study | ||||||||||||
| METHOD OF ASSESSMENT |
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| LECTURER/S | Ioannis Revolidis (Co-ord.) Mireille-Martine Sant |
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The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints. Units not attracting a sufficient number of registrations may be withdrawn without notice. It should be noted that all the information in the description above applies to study-units available during the academic year 2024/5. It may be subject to change in subsequent years. |
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