The Token and Blockchain Economy: Risks, Opportunities, and Implication

Abstract

On 1 January 2020, the first comprehensive blockchain act entered into force in Liechtenstein. Despite the rapid evolvement of this technology, most nations do not regulate it at all, which is why the subject remains a grey area. In order to protect the safety of market participants and blockchain users, adequate legislation is necessary. Although blockchain is often associated with cryptocurrencies, there are many more options for its commercial use. In the following, the function of blockchain technology will be explained and possible areas of application will be discussed. In addition, regulations in different jurisdictions will be illuminated. Thereafter, both the risks of and opportunities presented by blockchain technology and the token economy will be highlighted. In particular, the potential use of cryptocurrencies for terrorism financing, money laundering and corruption will be explained. Lastly, the implications of blockchain technology for corporations and international organisations will be demonstrated.