Cryptocurrencies: highlighting the perspective of Bosnia and Herzegovina

ABSTRACT

Digitalisation creates a new environment in which the development of advanced technology is becoming a reality. In that sense, a system of recording information that makes it difficult or impossible to change, hack or cheat is commonly known under blockchain technology. Recently, there has been much hype around blockchain technology since it became helpful for creating digital money, widely called cryptocurrencies.

This article stresses the importance of blockchain technology concerning cryptocurrencies, including its impact on Bosnia and Herzegovina. Finally, this article aims to offer potential solutions that might help regulate the cryptocurrencies concerning entity level in Bosnia and Herzegovina.

KEYWORDS:

• Blockchain technology
• cryptocurrencies
• the market of cryptocurrencies
• the legal framework for cryptocurrencies

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Ahram, T., Sargolzaei, A., Sargolzaei, S., Daniels, J., & Amaba, B. (2017, June). Blockchain technology innovations. In 2017 IEEE technology & engineering management conference (TEMSCON) (pp. 137-141). IEEE.

2 Yaga, D., Mell, P., Roby, N., & Scarfone, K. (2019). Blockchain technology overview. arXiv preprint arXiv:1906.11078.

3 Zheng, Z., Xie, S., Dai, H., Chen, X., & Wang, H. (2017, June). An overview of blockchain technology: Architecture, consensus, and future trends. In 2017 IEEE international congress on big data (BigData Congress) (pp. 557-564). IEEE.

4 The term 'virtual' is selected as referring to Internet-mediated technologies. Virtual currencies exist only in non-physical form. The definition of virtual currencies as digital representation is worldwide accepted: for the USA, see US Gov't Accountability Off., GAO-14-496, Virtual Currencies: Emerging Regulatory, Law Enforcement, and Consumer Protection Challenges, May 29, 2014, http://www.gao.gov.

5 This feature provides a distinction between virtual currencies and other forms of non-physical money. Indeed, the latter are digital representations of state-issued currency.

6 This feature provides a distinction between virtual currencies and other forms of non-physical money. Indeed, the latter are digital representations of state-issued currency.

7 See EBA (2014), “Opinion on ‘virtual currencies’, EBA/Op/2014/08, 11-14; GAO (2013), “Virtual Economies and Currencies”, GAO-13-516, 3; Ly, M. K. M. (2013). Coining bitcoin's Legal-Bits: Examining the regulatory framework for bitcoin and Virtual Currencies. Harv. JL & Tech., 27, 587; Kleiman, J. A. (2013). Beyond the silk road: unregulated, decentralised virtual currencies continue to endanger US national security and welfare. Nat'l Sec. L. Brief, 4, 59.

8 EBA (2014), “Opinion on ‘virtual currencies’”, eba.europa.eu, EBA/Op/2014/08, 7.

9 The ECB has initially proposed a definition of virtual currencies as “a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific community”; see ECB (2012), “Virtual Currency Schemes”, ecb.europa.eu, 13. Following the approach proposed by the EBA, the ECB considered it necessary to amend the definition proposed in its first scheme. See ECB (2015) “Virtual currencies schemes - a further analysis”, ecb.europa.eu, 25.

10 This scheme is adopted by the ECB, see ECB (2012), “Virtual Currency Schemes”, ecb.europa.eu, 13.

11 This classification has no connection with the real economy. The amount of virtual currency earned is correspondent to the player’s performance in the game. La Rocca, L. (2015). La prevenzione del riciclaggio e del finanziamento del terrorismo nelle nuove forme di pagamento. Focus sulle valute virtuali. Analisi Giuridica dell'Economia, 14(1), 201-222, 206 ff.

12 Virtual currencies can be bought using fiat currency for a pre-established purpose (i.e., to purchase virtual or tangible goods or services), but they cannot be switched back to the original currency.

13 Virtual currency in this scheme has all the characteristics of virtual currency with unidirectional flow plus the possibility to be sold according to the exchange rates with their currency. Bitcoin, released in 2009 to create a decentralised payment system that would exploit the peer-to-peer network, is currently the most widespread cryptocurrency. It holds 90% of the market, with an estimated value of €5 billion of circulating money. Nevertheless, currently, there are more than 1000 different cryptocurrencies: Bitcoin, Ethereum, Litecoin, Dogecoin, Namecoin, Darkcoin, Auroracoin, IOTA, Golem, Dash, Ripple, Manero, ZCash, etc. See Teti, A. (2012) Bitcoin la moneta nel cyberspazio, Gnosis, 10 ff; Mc Grath Goodman, L. The face behind bitcoin, available at www.magnewweek.com; Busto, N. (2016). Bitcoin tra disintermediazione e iper-intermediazione. Bitcoin tra disintermediazione e iper-intermediazione, 309-324; Grabowski, M. (2019). Cryptocurrencies: A Primer on Digital Money. Routledge.

14 Härdle, W. K., Harvey, C. R., & Reule, R. C. (2020). Understanding cryptocurrencies.

15 It is the so-called asymmetric public-key cryptography with double keys. It is an asymmetric cryptographic algorithm that uses two mathematically generated keys: the public key, used to encrypt the message or to verify the signature, and a private key, used to encrypt or digitally sign the document. The key is a random sequence of letters and numbers. To send the virtual currency, the user needs both keys, while to receive it, the user only needs the public key. See Hileman, G., & Rauchs, M. (2017). Global cryptocurrency benchmarking study. Cambridge Centre for Alternative Finance, 33, 33-113, 48.

16 There are two types of wallets: 1) custodian (it stores and controls the user's private key), and; 2) non-custodian (it lets the users themselves control their private keys). The non-custodian wallet can be provided by offering hardware that stores the key or software where the user manually enters the key. See G. Hileman, M. Rauchs, Global Cryptocurrency Benchmarking Study, Cambridge Centre for Alternative Finance 2017, 48.

17 It is good to note that the DLT system integrates sub sheet data (i.e., block), which follows each transaction on the chain. Moreover, the DLT system provides absolutely secrecy of the parties identity. Additionally, some cryptocurrencies, among which Bitcoin, provide their users with a pseudonym, some others, as Monero, provide complete anonymity. See for more Moser, M. (2013). Anonymity of bitcoin transactions; Grabowski, M. (2019). Cryptocurrencies: A Primer on Digital Money. Routledge. See Hileman, G., & Rauchs, M. (2017). Global cryptocurrency benchmarking study. Cambridge Centre for Alternative Finance, 33, 33-113, 48.

18 See Wagner, A. (2014), Digital vs. Virtual Currencies, Bitcoin Magazine, Aug. 22, 2014.

19 There are three ways to obtain cryptocurrencies: 1) by using one of the legally registered exchanges; 2) by mining new bitcoins, and; 3) by the exchange of goods and services for cryptocurrencies. Hileman, G., & Rauchs, M. (2017). Global cryptocurrency benchmarking study. Cambridge Centre for Alternative Finance, 33, 33-113.

20 Bitcoins are decentralised currencies, extracted through an encrypted system, transferred through a shared blockchain, created by broadcasters using the software. Other decentralised virtual currencies are, among the others: Nextcoin, Litecoin, Namecoin, and Primecoin.

21 Since cryptocurrencies are not subject to the legal requirements applicable to financial institutions, the opening of the wallet does not require the signing of a bank contract or the completion of procedures for adequate customer verification.

22 Each platform has its own access authentication mechanisms, e.g., a double authorisation can be requested through username and password and alphanumeric code sent from time to time to the phone number indicated by the owner of the wallet.

23 Utility tokens are designed as purpose-specific. Their value is claimed upon the fulfilment of the obligation by the issuer to which they are attached. Investment tokens are used for fundraising. The issuer offers the tokens publicly, and the acquirer receives a return on this investment (e.g., resembling the function of securities in the stock markets). Finally, investment tokens are used as means of payment for anyone willing to accept them. For more see: Li, X., Wu, X., Pei, X., & Yao, Z. (2019, March). Tokenization: Open asset protocol on blockchain. In 2019 IEEE 2nd International Conference on Information and Computer Technologies (ICICT) (pp. 204-209). IEEE.; Tian, Y., Lu, Z., Adriaens, P., Minchin, R. E., Caithness, A., & Woo, J. (2020). Finance infrastructure through blockchain-based tokenization. Frontiers of Engineering Management, 7(4), 485-499.

24 The type of blockchain technology determines how the cryptocurrency is transacted and also the speed of transactions.

25 For instance, the number of Bitcoins is limited to 21 million (estimates predict 99% extraction by 2027), while the value of ICOs (e.g., Ethereum) generally depends on factors related to the success of the start-up and the funded project.

26 There is a significant reduction in costs due to the removal of intermediaries such as banks in the payment processes. For more see Bunjaku, F., Gjorgieva-Trajkovska, O., & Miteva-Kacarski, E. (2017). Cryptocurrencies–advantages and disadvantages. Journal of Economics, 2(1), 31-39.; MILES, A. R. (2014). ADVANTAGES OF CRYPTOCURRENCIES OVER FIAT MONETARY SYSTEMS AND AN INVESTIGATION INTO THEIR POTENTIAL ADOPTION AS A WORLD CURRENCY. Rhodes University.

27 For a list of the advantages of cryptocurrencies see European Parliament (2016). Resolution on virtual currencies, OJ C 76, 28.2.2018, 76-81, point 1. Moreover, see Sherlock, M. (2016). Bitcoin: The case against strict regulation. Rev. Banking & Fin. L., 36, 975. Leonard, D., & Treiblmaier, H. (2019). Can cryptocurrencies help to pave the way to a more sustainable economy? Questioning the economic growth paradigm. In Business transformation through Blockchain (pp. 183-205). Palgrave Macmillan, Cham.

28 See Overlooked and underserved, The Economist, Sept. 9, 2017, at 57–58.

29 Houben, R., & Snyers, A. (2018). Cryptocurrencies and blockchain. Bruxelles: European Parliament.

30 Speculative bubbles as arisk are presented due to high inconstancy that may be extreme (e.g., rise in the price of Bitcoin). See Ciaian, P., Rajcaniova, M., & Kancs, D. A. (2016). The economics of BitCoin price formation. Applied Economics, 48(19), 1799-1815.

31 See European Parliament (2016). Resolution on virtual currencies, OJ C 76, 28.2.2018, 76-81, point 2.

32 Anonymity is a consequence of the use of programmes aimed at circumventing the traceability of transactions. In addition, the transfers all take place on the blockchain which requires the registration of every single transfer, which is not the case with circulating money. On the anonymity features of Bitcoin see Teomete Yalabık, F., & Yalabık, İ. (2019). Anonymous Bitcoin v enforcement law. International Review of Law, Computers & Technology, 33(1), 34-52; Möser, M., & Böhme, R. (2017). The price of anonymity: empirical evidence from a market for Bitcoin anonymization. Journal of Cybersecurity, 3(2), 127-135.

33 See Cuccuru, P. (2017). Blockchain e automazione contrattuale. Riflessioni sugli smart contract. La Nuova giurisprudenza civile commentata, 33(1), 107-119, 110; Mancini, M. (2015). Valute virtuali e Bitcoin. Analisi Giuridica dell'Economia, 14(1), 117-138, 120.

34 Goitom, H. (2018, June). Regulation of cryptocurrency in selected jurisdictions. In The Law Library of Congress, Global Legal Research Centre, Washington, DC, ReportJune; Chu, D. (2018). Broker-dealers for virtual currency: regulating cryptocurrency wallets and exchanges. Colum. L. Rev., 118, 2323.

35 For instance, the income generated from a cryptocurrency transaction may be taxed as revenue generated from the sale of security bonds (e.g., Argentina) or as a foreign currency (e.g., Switzerland).

36 See European Parliament resolution of 26 May 2016 on virtual currencies (2016/2007(INI)), OJ C 76, 28.2.2018, 76-81, point 4.

37 See Capogna, A., & Peraino, L. (2015). Bitcoin: profili giuridici e comparatistici. Analisi e sviluppi futuri di un fenomeno in evoluzione. Rivista Diritto Mercato Tecnologia, Roma, 5(3), 32-74, 52.

38 In the following analysis, a classification will be proposed for bidirectional cryptocurrencies other than ICO’ since in the latter one the contractual relationship between investor and start-up is generally governed by the so-called white papers that are general conditions of service subject to the law of the place of issue of the token. The purchase of the token is generally considered irreversible and is made with the express declaration of full knowledge and assumption of risk by the investor about their nature.

39 It should be noted the value reserve as the monetary function, in particular, causes problems concerning the possible overlap between the investment instruments and national currency. The exchange function depends on the agreement of the parties, in which sense the unit of account function would be undermined by the uncertainties of the exchange markets. Finally, the extreme volatility of the cryptocurrency quotation prevents the value reserve function. The European Central Bank has highlighted how the extreme volatility of cryptocurrencies makes them possibly similar to random and speculative instruments. These functions have been translated by legal science into means of payment, a unit of measurement of value, and an instrument of capitalisation of assets. See Vandezande, N. (2018). Virtual Currencies A Legal Framework. Intersentia, 137 ff; Mandjee, T. (2014). Bitcoin, its legal classification, and its regulatory framework. Journal of Business and Securities Law, 15(2), 157. ^[39]Reference is made following statist theory, functional economic theory, and sociological theory. For an in-depth examination see, among others, Vardi, N. (2015). " Criptovalute" e dintorni: alcune considerazioni sulla natura giuridica dei bitcoin. Diritto dell'informazione e dell'informatica, 31(3), 443-456, 443; Gasparri, G. (2015). Timidi tentativi giuridici di mess a fuoco del bitcoin: miraggio monetario crittoanarchico o soluzione tecnologica in cerca di un problema?. Diritto dell'informazione e dell'informatica, 31(3), 415-442; Bocchini, R. (2017). Lo sviluppo della moneta virtuale: primi tentativi di inquadramento e disciplina tra prospettive economiche e giuridiche. Dir. inf, 1, 27. The European Central Bank has highlighted how the extreme volatility of cryptocurrencies makes them possibly similar to random and speculative instruments.

40 See Vandezande, N. (2018). Virtual Currencies A Legal Framework. Intersentia, 163; Low, K. F., & Teo, E. G. (2017). Bitcoins and other cryptocurrencies as property? Law, Innovation and Technology, 9(2), 235-268.

41 See Statute of the European System of Central Banks and of the European Central Bank, Protocol No 4.

42 See Commission Recommendation of 22 March 2010 on the scope and effects of legal tender of euro banknotes and coins, OJ L83, 30.3.2010, p. 70-71, ELI: http://data.europa.eu/eli/reco/2010/191/oj.

43 This solution comes from the application of the so-called ‘State Theory of Currency’. On this point see, in particular, Vardi, N. (2015). " Criptovalute" e dintorni: alcune considerazioni sulla natura giuridica dei bitcoin. Diritto dell'informazione e dell'informatica, 31(3), 443-456.

44 Burlone, P.L. & De Caria, R., (2014). Bitcoin e le altre criptomonete. Inquadramento giuridico e fiscale.it; Passaretta, M. (2017). Bitcoin: ill leading case italiano. Banca Borsa Titoli di Credito: rivista di dottrina e giurisprudenza, 70(4), 471-490; Razzante, R. (2018) Bitcoin: tra diritto e legislazione, Notariato, 383.

45 See Razzante, R. (2018) Bitcoin: tra diritto e legislazione, Notariato, 383.

46 Bocchini, R. (2017). Lo sviluppo della moneta virtuale: primi tentativi di inquadramento e disciplina tra prospettive economiche e giuridiche. Dir. inf, 1, 27.

47 Bocchini, R. (2017). Lo sviluppo della moneta virtuale: primi tentativi di inquadramento e disciplina tra prospettive economiche e giuridiche. Dir. inf, 1, 27 points how "the so-called formalistic doctrine (M. Costantino, I beni in generale, in Trattato di dir. priv. directed by Rescigno, vol. VII, Turin, 1982, p.13) observes that only those entities or resources that the legal system qualifies as such are goods. Legal assets are numerus clausus because only the legal system can qualify entities as legal assets. The judge, therefore, cannot create new goods. This power over the entities of the external mode, attributed by the legal system, is the active subjective legal situation. Therefore, the theory of goods translates in reality into a theory of subjective active juridical situations, because the goods do not exist juridically if the legal system does not foresee an active subjective juridical situation on it. This address in turn is divided into two strands. According to the first line of argument, any subjective active legal situation acts as a criterion for the qualification of the entity as an asset and, therefore, it is sufficient that a rule bears the fundamental attribution to an entity of a subjective active legal situation, even if relative (right of credit), for that entity to acquire the legal dignity of an asset (Santini, G. (1988). Commercio e servizi: due saggi di economia del diritto. Società editrice il Mulino, 419). According to another interpretation, on the other hand, credit rights do not constitute criteria for qualifying resources as goods, because credit rights solve only problems of wealth circulation but not of original wealth attribution. It is necessary, therefore, that there is some norm that bears a fundamental original attribution of an entity to a subject and this happens through the attribution of a power that presents itself as absolute and, that is, erga omnes. In conclusion, only the existence of an absolute legal situation on a resource of the outside world as a result of a rule of law determines the legal qualification of that entity as a legal asset (Scozzafava, O. T. (1982). I beni e le forme giuridiche di appartenenza, Giuffrè, 422).

48 However, there is evidence in which cryptocurrencies could be qualified as a dominical right. For instance, domain names, starting from their entry into the Network, have been brought back to the United States to the notion of property understood, the latter, as bundles of right, i.e. as a set of heterogeneous and autonomous faculties and rights able to be exercised even separately by different subjects (between possession, use or alienation). However, this is a development that is difficult to export into some jurisdictions. For instance, the Italian legal system is referred to a different conception of the right of ownership governed by the rigid dictates (art. 810 of the Italian Civil Code) and to the traditional vision. See Bocchini, R. (2017). Lo sviluppo della moneta virtuale: primi tentativi di inquadramento e disciplina tra prospettive economiche e giuridiche. Dir. inf, 1, 27

49 See Legislative Decree 385/1993, referred to as the Consolidated Law on Financial Intermediation (TUF).

50 Article 1(4) TUF refers to the list in Section C of Annexe I TUF. On the exhaustiveness of the list, see, among others: Salamone, L. (1998). La nozione di “strumento finanziario” tra unità e molteplicità”. Rivista di diritto commerciale, 716; Chionna, V. V. (2008). Le forme dell'investimento finanziario: dai titoli di massa ai prodotti finanziari (Vol. 8). Giuffrè Editore, 191. Under Article 1 (4) TUF, financial instruments are financial instruments, sub specie of differential financial contracts - contracts for the purchase and sale of foreign currency, unrelated to commercial transactions and settled by difference, including through automatic renewal operations (so-called "roll-over"), such as additional currency transactions identified under Article 18, paragraph 5. The latter rule gives the Minister of Economic and Finance to take into account the evolution of the financial markets and the adaptation rules established by the EU authorities (by regulation adopted after consultation with the Bank of Italy and Consob). The power to identify new categories of financial instruments, new investment services, and activities, and new ancillary services, indicating which entities are subject to forms of prudential supervision, may carry out the new services and activities, as well as adopt the rules for the implementation and integration of asset reserves provided for in the Article 18 as mentioned above, in compliance with EU provisions. In general, Article 1, paragraph 2 bis, TUF entrusts the Minister of Economy and Finance with the regulation referred to in Article 18, paragraph 5 (b) identifies other derivative contracts referred to in point (j) of subparagraph 2 having the characteristics of other derivative financial instruments, traded on a regulated market or MTF, cleared and executed through recognised clearinghouses or subject to regular margin calls.

51 Atypical financial products represent all forms of investment with a financial nature. For instance, according to art. 1, letter u, the second part, TUF, bank or postal deposits not represented by financial instruments do not constitute financial products.

52 See Legislative Decree No. 58 of 24 February 1998 - Consolidated Law on Financial Intermediation, pursuant to Articles 8 and 21 of Law No. 52 of 6 February 1996, OJ No. 71 of 26.3.1998, available at www.gazzettaufficiale.it/eli/id/1998/03/26/098G0073/sg. The possibility of recognising new financial instruments, such as new investment activities and services, even outside of the strictly envisaged hypotheses, rests precisely on art. 18(5) TUF.

53 Art. 1 (4) TUF.

54 See among all Campagna, M. (2019). Criptomonete e obbligazioni pecuniarie. In Rivista di diritto civile 1/2019. (pp.183-221); Pernice C., (2018). La controversa natura giuridica di Bitcoin: un’ipotesi ricostruttiva. In Rassegna di diritto civile 1/2018. (pp. 333-371).

55 Razzante, R. (2018) Bitcoin: tra diritto e legislazione, Notariato, 383.

56 System provided for in Directive 2004/39/EC.

57 See Article 1 (1) (u) TUF.

58 Financial products would constitute the outermost ring of a group of concentric circles of which "financial instruments" and "securities" represent the most internal ones. See CHIONNA, Le forme dell'investimento finanziario, Milan, 2008, 189.

59 Indeed, public authorities consider such an investment with a financial nature that can be subject to different financial risks. Additionally, see Consob resolution no. 19866 of 1/2/2017 concerning the suspension, under art. 101(4)(b) Legislative Decree no. 58/1998, of the advertising activity carried out through the internet site relating to the public offer promoted by the company under foreign law concerning "crypto-currency extraction packages"; Consob resolution no. 19866 of 20/4/2017 containing a prohibition, under art. 101(4)(c) Legislative Decree no. 58/1998, of the advertising activity carried out through the internet site relating to the public offer promoted by the company under foreign law concerning "crypto-currency extraction packages"; Consob resolution no. 19866 of 20/4/2017 containing a prohibition, under art. 101(4)(c) Legislative Decree no. 58/1998, of the advertising activity carried out by the company under foreign law concerning the "crypto-currency extraction packages". Consob resolution no. 20241 of 20 December 2017 suspending, under art.99(1)(b), Legislative Decree no. 58/1998, the offer to the public resident in Italy made also through the Internet site h concerning investments of a financial nature.

60 See Rinaldi, G. (2019). Approcci normativi e qualificazione giuridica delle criptovalute. In Contratto e impresa 1/2019. (pp. 257-296).

61 See, among others, Passaretta, M. (2017). Bitcoin: ll leading case italiano. Banca Borsa Titoli di Credito: rivista di dottrina e giurisprudenza, 70(4), 471-490, according to which from the financial products and instruments must be kept separate the instruments for the disbursement of savings (e.g. mortgages, leasing) not constituting forms of investment of savings.

62 See Art. 1 (1) and 18 (5) TUF.

63 Di Stazio, V. (2004). La sollecitazione all'investimento e le responsabilità degli intermediari finanziari. Consob, Communication No. DAL/97006082, 10 July 1997.

64 Such qualification is adopted by some government revenue agencies. For more see Vardi, N. (2015). " Criptovalute" e dintorni: alcune considerazioni sulla natura giuridica dei bitcoin. Diritto dell'informazione e dell'informatica, 31(3), 443-456, 443.

65 See Moro Visconti, R. (2020). The valuation of digital intangibles. Technology, marketing and the internet.

66 See Antonakakis, N., Chatziantoniou, I., & Gabauer, D. (2019). Cryptocurrency market contagion: Market uncertainty, market complexity, and dynamic portfolios. Journal of International Financial Markets, Institutions and Money, 61, 37-51.

67 See Al-Yahyaee, K. H., Mensi, W., & Yoon, S. M. (2018). Efficiency, multifractality, and the long-memory property of the Bitcoin market: A comparative analysis with stock, currency, and gold markets. Finance Research Letters, 27, 228-234.

68 See Bouri, E., Molnár, P., Azzi, G., Roubaud, D., & Hagfors, L. I. (2017). On the hedge and safe haven properties of Bitcoin: Is it really more than a diversifier?. Finance Research Letters, 20, 192-198., and Guesmi, K., Saadi, S., Abid, I., & Ftiti, Z. (2019). Portfolio diversification with virtual currency: Evidence from bitcoin. International Review of Financial Analysis, 63, 431-437.

69 See Bech, M. L., & Garratt, R. (2017). Central bank cryptocurrencies. BIS Quarterly Review September.

70 See Antonakakis, N., Chatziantoniou, I., & Gabauer, D. (2019). Cryptocurrency market contagion: Market uncertainty, market complexity, and dynamic portfolios. Journal of International Financial Markets, Institutions and Money, 61, 37-51.

71 See Current and Upcoming Trends in CryptoCurrency Market Cap available at: https://www.globenewswire.com/news-release/2021/02/23/2180372/0/en/Current-and-Upcoming-Trends-in-CryptoCurrency-Market-Cap-to-Hit-5-190-62-Million-by-2026-Soars-at-30-CAGR-Facts-Factors.html

72 Milne, A. (2016). Central securities depositories and securities clearing and settlement: Business practice and public policy concerns. In Analyzing the economics of financial market infrastructures (pp. 334-358). IGI Global.

73 Narayanan, A., Bonneau, J., Felten, E., Miller, A., & Goldfeder, S. (2016). Bitcoin and cryptocurrency technologies: a comprehensive introduction. Princeton University Press.

74 See Giudici, G., Milne, A., & Vinogradov, D. (2020). Cryptocurrencies: market analysis and perspectives. Journal of Industrial and Business Economics, 47(1), 1-18.

75 Source: https://coinmarketcap.com/

76 See discussion of Böhme, R., Christin, N., Edelman, B., & Moore, T. (2015). Bitcoin: Economics, technology, and governance. Journal of economic Perspectives, 29(2), 213-38.

77 See Giudici, G., Milne, A., & Vinogradov, D. (2020). Cryptocurrencies: market analysis and perspectives. Journal of Industrial and Business Economics, 47(1), 1-18.

78 For example, the notion of atomic swaps is a mechanism where one cryptocurrency can be exchanged directly for another cryptocurrency, without the need for a trusted third party such as an exchange. The exchanges can send cryptocurrency to a user's personal cryptocurrencies wallet. However, Jordan Kelley, founder of Robocoin, launched the first bitcoin ATM (backomat) in the United States on 20 February 2014. The kiosk installed in Austin, Texas, is similar to bank ATMs but has scanners to read government-issued identification such as a driver's licence or a passport to confirm users' identities.

79 For instance, in the Balkan region, there are examples in which Bitcoin made the purchase. Therefore, in the context of the properties, cryptocurrencies help purchase movable properties. For more, see https://bonitet.com/crna-gora-prva-krava-placena-bitcoinom/

80 Source available at https://www.globenewswire.com It is good to note that market seems to be anticipated to grow in the future years.

81 A darknet market is a commercial website on the web that operates via darknets such as Tor or I2P. The function is primarily as black markets, selling or brokering transactions involving drugs, cyber-arms, weapons, counterfeit currency, stolen credit card details, forged documents, unlicensed pharmaceuticals, steroids, and other illicit goods as well as the sale of legal products.

82 See Ali, S. T. (2015, March). Bitcoin: Perils of an Unregulated Global P2P Currency (Transcript of Discussion). In Cambridge International Workshop on Security Protocols (pp. 294-306). Springer, Cham; Teomete Yalabık, F., & Yalabık, İ. (2019). Anonymous Bitcoin v enforcement law. International Review of Law, Computers & Technology, 33(1), 34-52; Möser, M., & Böhme, R. (2017). The price of anonymity: empirical evidence from a market for Bitcoin anonymization. Journal of Cybersecurity, 3(2), 127-135.

83 See Ilić, M., & Miljković, M. (2018). Monetarna politika savezne republike jugoslavije 1994. godine. ekonomski održivi razvoj, 69.; Savić, M., & Savić, M. (2011). Mesto i uloga monetarne politike Bosne i Hercegovine prilikom ulaska u Evropsku Monetarnu Uniju. Singidunum Scientific Review/Singidunum Revija, 8(2).

84 Pekić, D., & Pekić, D. Monetarni režim bosne i hercegovine–prednosti i nedostaci za ekonomske politike u republici srpskoj. Jahorinski poslovni forum 2016 (p. 241).

85 See Zakon o Centralnoj Banci Bosne i Hercegovine ("Sl. glasnik BiH", br. 1/1997, 29/2002, 8/2003, 13/2003, 14/2003 - ispr., 9/2005, 76/2006 i 32/2007).

86 For example, in Bosnia, it is possible to buy cryptocurrencies through https://www.olx.ba/kriptovalute/5/2407

87 See https://bcx.ba/

88 For instance, the tax treatment in Bosnia is the subject matter of the entity level. Therefore, in Bosnia are presented two legal acts, one for the entity of Republika Srpska and one for the Federation of Bosnia and Herzegovina. However, none of them recognises the tax on the income realised through cryptocurrencies transactions. See Income Tax Law of Republika Srpska ("Sl. glasnik RS", br. 60/2015, 5/2016 - ispr., 66/2018, 105/2019 i 123/2020), and Income Tax Law of Federation BiH ("Sl. novine FBiH", br. 15/2016 i 15/2020).

89 See Art 2 Law on the Central Bank of Bosnia and Herzegovina.

90 See Law on Law on Direct Foreign Investment Policy ("Sl. glasnik BiH", br. 4/1998, 17/1998, 13/2003, 48/2010 i 22/2015).

91 See Company Law of Republika Srpska ("Sl. glasnik RS", br. 127/2008, 58/2009, 100/2011, 67/2013, 100/2017 i 82/2019) and Company Law of Federation of BiH ("Sl. novine FBiH", br. 81/2015).

92 Zakon o tržištu hartija od vrijednosti (Sl. glasnik RS", br. 92/2006, 34/2009, 8/2012 - odluka US, 30/2012, 59/2013, 86/2013 - odluka US, 108/2013 i 4/2017).

93 An initial coin offering (ICO) is the cryptocurrency industry’s equivalent to an initial public offering (IPO). A company looking to raise money to create a new coin, app, or service launches an ICO as a way to raise funds. In reality, interested investors can buy into the offering and receive a new cryptocurrency token issued by the company. This token may have some utility in using the product or service the company is offering, or it may just represent a stake in the company or project.

94 Over-the-counter (OTC) refers to the process of how securities are traded for companies not listed on a formal exchange.