The recent dynamic growth of virtual currencies presents the increasingly realistic chance of creation of an entirely new model of money and payment. Innovations allowing payments to be made at lightning speed, across state borders and outside of official payment systems, are appearing before our very eyes. Such payments are made without the involvement of banks or intermediaries, and often anonymously. This is a revolution not only for traditional payment systems, but also for the law. Virtual currencies reveal numerous legal issues that could not even have been imagined before.
The magnitude of the challenges posed by virtual currencies may be easily grasped by asking a few fundamental questions. If there is an error when carrying out a Bitcoin transaction, does the party have any kind of claim? Whom would the claim be against? Is theft of virtual currencies a crime at all? If so, where is it committed? Can Bitcoins be inherited? Can Bitcoin be pledged as collateral? If so, what would be the governing law? These are just a few examples of the questions that must be faced when looking closer at the nature of virtual currencies.
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