Dr. Jamal Abdulaziz Omar Al Othman
Assistant Professor of Commercial Law
Imam Malik College ‎for Sharia and Law,
Dubai, UAE

Abstract:

This research aims to study the legal problem of virtual currencies and its impact on ‎shaping the future by employing them to improve the economic and investment ‎status of countries and societies, and by shedding light on these emerging tools, ‎which have raised – and continue to raise – many questions and problems, by being ‎digital units that do not have a tangible physical entity. They are produced by ‎computer programs which are not subject to the control of central banks, and ‎they are traded among their dealers, either for the purpose of speculation through ‎electronic platforms, to be exchanged by their dealers for cash currencies, or to be ‎used as a fulfillment tool accepted by sellers, in exchange for their goods or ‎services offered to the public.‎
‎“Bitcoin” is one of the most popular virtual currencies that was issued in 2009, ‎followed by “Litecoin”, “Nimoken” in 2011, “Bercoin” in 2012, “Ripple” in 2013, ‎‎“Dash” in 2014, and “Ethereum.” in 2015, and “Feathercoin”, “DinarCoin” and ‎‎“Zcash” in 2016. Virtual currencies raise many problems related to their nature, ‎types, risks generated by them, and what distinguishes them from conventional ‎currencies, such as: cash currencies and electronic money that represent a cash ‎value stored on an electronic means paid in advance, as well as the characteristics of ‎virtual currencies, their legal nature, and the regional and international position on ‎them.‎
Virtual currencies pose many risks and challenges, either to their parties, or to their ‎ability to be a fulfillment tool, or to the challenges they pose in facing laws and ‎regulations. In sum, these risks and challenges are represented either in the lack of ‎liquidity and system failures, or in the theft of currency from customers’ accounts, ‎or due to the fluctuation in its value as a result of the speculations that take place on ‎them, in addition to the fact that the majority of countries and their central banks, ‎and international bodies, have not recognized it as money until now. It is also ‎believed that virtual currencies may be a means of money laundering, terrorist ‎financing, tax evasion, or fraud operations with the intent to seize money by ‎offering fake currencies, or through illegal trading platforms.‎
There is almost unanimity among the governments of countries and international ‎bodies, as well as central banks, that virtual currencies are not money in the legal ‎sense of money, and do not possess a cash balance, nor the power of discharge, but ‎rather they are – from the point of view of some – considered a «commodity», and ‎some considered them « a means of exchange”, with some countries seeing that ‎they perform the functions of money – to some extent – for their dealers.‎
‎ The researcher combined the descriptive approach, the inductive approach, the ‎analytical approach, and the comparative approach, using many Arabic and English ‎references, though the Arabic references prevailed. The researcher presented the ‎position of Arab and foreign legislation on virtual currencies and presented many ‎Arab and foreign laws. The researcher also presented the position of the European ‎Central Bank and the European Commission. In any case, the position of the ‎legislation ranges between prohibiting dealing in virtual currencies and permitting ‎them with restrictions.‎
‎ The researcher presented the virtual currencies through a plan consisting of an ‎introduction, two chapters, and a conclusion, which included findings and ‎recommendations, and then followed it up with a list of references. In the ‎introduction, he addressed the research problem, its importance, objectives, ‎methodology, and divisions in the plan. In the first topic, the researcher dealt with ‎the nature of virtual currencies, through three demands in which he presented, in ‎order: the definition of virtual currencies, the emergence and types of virtual ‎currencies, and the dangers of virtual currencies.‎
The first two requirements were divided into two parts, while the third requirement ‎was divided into three parts. As for the second topic, the researcher dealt with the ‎legal nature of virtual currencies, and the legal position on them, through two ‎questions, the first of which dealt with the legal nature of virtual currencies, and in ‎the second, the position on virtual currencies. The researcher divided the first ‎requirement into three parts, while the second requirement was divided into three ‎parts. In the conclusion, the researcher presented his findings and ‎recommendations.‎

Keywords: digital currencies, bitcoin, blockchain, money, trading platforms.‎

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