DIGITAL CURRENCY LEGALIZATION: A COMPARATIVE ANALYSIS OF GLOBAL APPROACHES

Abstract

The evolution of money has been an integral part of human history, adapting to the changing needs and complexities of society. Early societies utilized seashells as a primitive form of currency, though its limited supply and inconvenience for widespread use prompted the emergence of unified national metal and paper currencies. With the relentless growth of wealth and advancements in technologies like blockchain and cryptography, the exploration of digital currency as an alternative to physical money has become a focal point. This shift is driven by the desire to better accommodate contemporary lifestyles and address evolving economic demands. Notably, certain countries have taken significant steps in the study and implementation of digital currencies as a cost-effective replacement for traditional cash. This paper delves into the case of China, where research into legal digital currency commenced in 2014. In June 2017, China established the Central Bank Digital Currency Research Institute to spearhead these efforts. In April 2020, the nation initiated digital currency testing in four pilot areas: Xiongan, Suzhou, Chengdu, and Shenzhen. The scope of this pilot program has since expanded to encompass six additional regions, including Shanghai, Changsha, Hainan, Xi'an, Dalian, and Qingdao, while concurrently diversifying its application scenarios. Furthermore, the People's Bank of China has introduced the "Law of the People's Bank of China (Draft Revision for Comment)" to provide a solid legal framework for the prospective integration of legal digital currency within China's financial landscape. The establishment of a legal foundation for digital currency is anticipated to pave the way for the next phase of its adoption, bridging the gap between the traditional monetary system and the rapidly evolving digital economy