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University of Kansas Law Review




Bitcoin and the other cryptocurrencies spawned by the innovation of blockchain programming have exploded in prominence, both in gains of massive market value and in dramatic market losses, the latter most notably seen in connection with the failure of the FTX cryptocurrency exchange in November 2022. After years of investment and speculation, however, something crucial has faded: the original use case for Bitcoin as a system of payment. Can cryptocurrency-as-a-payment-system be saved, or are day traders and speculators the actual cryptocurrency future? This article suggests that cryptocurrency has been hobbled by a lack of foundational commercial and consumer-protection law that enabled the rise of other noncash payment systems, such as credit cards. The original payment system purpose of Bitcoin and its progeny is at a legal fork and is, at this moment, eminently savable because of the presence of two uniform acts that are ripe for enactment by the states. First, the 2022 amendments to the Uniform Commercial Code, which add new Article 12, fill in commercial law gaps for cryptocurrency that give it transactional certainty on a par with traditional checks and payment cards. Second, the Uniform Regulation of Virtual Currency Businesses Act creates crucial consumer protection for users of third-party digital wallets, transforming a technical convenience into a safer interface for mainstream users. If proponents of cryptocurrency wish to see it thrive as a mainstream payment system, then they would do well to press for enactment of the 2022 UCC Amendments and the URVCBA. Otherwise, the future of blockchain is likely to be dominated by a potentially endless series of speculative bubbles rather than as acceptance as a payment system.

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University of Kansas School of Law

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