* Prof Dr Corinne Zellweger-Gutknecht, Professor, Kalaidos University of Applied Sciences, Zurich, Switzerland and Private Lecturer in Private and Civil Procedure Law, Financial Market Law and Comparative Law, Faculty of Law, University of Zurich, Switzerland.
1 With regard to the definitions given by the FATF, ECB, IMF, and Committee on Payments and Market Infrastructures (CPMI), see Benjamin Geva, ‘Disintermediating Electronic Payments: Digital Cash and Virtual Currencies’ (2016) 31(12) Journal of International Banking Law and Regulation 661. See also Charles Proctor’s Chapter 3, ‘Cryptocurrencies in International and Public Law Conceptions of Money’, in this volume.
2 Committee on Payments and Market Infrastructures and Markets Committee, ‘Central Bank Digital Currencies’ (March 2018) Bank for International Settlements 3 et seq (graph 1) <www.bis.org/cpmi/publ/d174.pdf> accessed 23 August 2018.
3 Morten Bech and Rodney Garratt, ‘Central Bank Cryptocurrencies’ (September 2017) Bank for International Settlements Quarterly Review 55, 60 <www.bis.org/publ/qtrpdf/r_qt1709f.pdf> accessed 23 August 2018.
4 Bank for International Settlements (n 2) 4.
5 As to the historical origins in the goldsmith banking receipts, see Benjamin Geva, ‘Payment Law: Legislative Competence in Canada’ (2015) 31(1) Banking and Finance Law Review 1, 9.
6 See Benjamin Geva, The Payment Order of Antiquity and the Middle Ages: A Legal History (Hart Publishing, 2011) 583 on material negotiability.
7 Serge Lanskoy, ‘The Legal Nature of Electronic Money’ (2000) 3(2) Revista de Análisis del Banco Central de Bolivia 97, 103.
9 The League of Nations, Convention of 7 June 1930, providing a Uniform Law for Bills of Exchange and Promissory Notes.
10 See the Swiss Federal Act on the Swiss National Bank of 6 June 1905 (National Bank Act, NBA), Official Compilation (OC) no 22 p 47, art 22 et seq. Said articles were based on art 39 of the Swiss Constitution as amended by a referendum on 23 December 1891.
11 See Swiss Federal Council Decree of 30 July 1914 on the issue of CHF 20 banknote and the statutory exchange rate for SNB banknotes, OC no 30 p 333 (in German only). It was repealed on 28 March 1930: OC no 46 p 101.
12 See Swiss Federal Council Decree of 27 September 1936 on currency measures, OC no 52 p 741.
13 The vote on the revised art 39 of the Swiss Constitution took place on 15 April 1951.
14 Federal Council Decree of 29 June 1954 on the statutory price for banknotes and on repealing their conversion to gold, OC 1954 p 654. Three days later, the NBA of 1953 entered into force. See Swiss Federal Act on the Swiss National Bank of 23 December 1953, OC 1954, p 599.
15 Bank of Canada v Bank of Montreal  1 SCR1148 1166 et seq.
16 See already Frederick A Mann, The Legal Aspect of Money (OUP, 1938) 31: also known as forced issue, compulsory tender, cours forcé or Zwangskurs.
17 David V Snyder, ‘The Case of Natural Obligations’ (1996) 56(2) Louisiana Law Review, 423 et seq.
19 Act of 5 August 1914 (OJ of 6 August 1914 p 7127), art 3.
20 Act of 25 June 1928 (OJ of 25 June 1928 p 7085), art 2.
21 Lanskoy (n 7) 103 et seq.
24 See the pertinent art 99 Constitution 1999.
25 Federal Act on Currency and Payment Instruments of 22 December 1999 (CPIA), OC 2000 p 1144, art 2 let B.
27 See eg Carl A Wieland, ‘Kommentar zum Schweizerischen Zivilgesetzbuch (Zürcher Kommentar), Das Sachenrecht des schweizerischen Zivilgesetzbuchs: art 641-977 ZGB’ (Schulthess 1909): comments ad art 727 Swiss Civil Code no 6 (and ad art 481 Swiss Code of Obligations, SCO). Namely joining and mixing according to art 727(1) and (2) of the Swiss Civil Code (SCC) did not fit, because, if several pieces of cash are brought together such that the original owners can no longer be identified, this creates neither a new object (para 1) nor two components of primary and secondary nature, respectively (para 2).
28 See decision of 1917 of the Swiss Federal Court 47 II 267 consideration 2, p 270 et seq also with reference to the ius commune.
29 For further details as to what follows, see Geva (n 6) 510–18 with further references.
30 Act to amend the Bank of Canada Act, Statutes of Canada (SC) 1966–67, c 88, s 12, amending the Bank of Canada Act, Revised Statutes of Canada (RSC) 1952, c 13, now RSC 1985, c B-2.
31 Bank of Canada v Bank of Montreal  1 SCR 1148, of 14 June 1977.
34 Banco de Portugal v Waterlow & Sons Ltd  AC 452 (HL).
37 SC 1980-81-83, c 40 Part III, s 49, now RSC 1985, c B-2, s 25(6).
38 Cf eg Charles Proctor, Mann on the Legal Aspect of Money (7th edn, OUP 2012) paras 1.36 and 1.46, with reference to the Bank of England’s ‘promise to pay’ on sterling banknotes.
39 Alastair Hudson, The Law of Finance (Sweet & Maxwell, 2009) 49, referring, inter alia, to the signature of the Chief Cashier of the Bank of England reproduced on the note.
40 Kelvin FK Low and Ernie Teo, ‘Legal Risks of Owning Cryptocurrencies’ in David Lee Kuo Chuen and Robert H Deng (eds), Handbook of Blockchain, Digital Finance, and Inclusion Vol 1 (Academic Press, 2017) 225, 226.
41 Michael Bridge, Personal Property Law (4th edn, OUP 2015) 22.
42 Geva (n 6) 518 (emphasizes added).
45 ibid 11, with further reference.
46 Bank of Canada Act, RSC, 1985, c B-2, art 18(b) (emphasis added); see also art 18(l) et seq.
47 Canadian Payments Act, SC, 1985, c C-21, arts 4 and 5.
48 Currency Act, RSC, 1985, c C-52, arts 8(1) and 8(2); Bank of Canada Act, art 25; Royal Canadian Mint Act, RSC, 1985, c R-9, art 6.
50 The Statute of the ECB annexed to the EU Treaties, art 17 variant 1 (emphasis added). The competence to maintain accounts is specified in much detail, inter alia, in art 21(1) re public bodies, art 23 lemma 4 re foreign entities, 22 variant 1 re participants of clearing and payment systems and art 24 variant 4 re central bank staff members.
52 eg deposit facility and fixed-term deposit (see arts 4.2 and 3.5 of the Guidelines of the European Central Bank of 20 September 2011 on monetary policy instruments and procedures of the Eurosystem, ECB/2011/14).
53 See ECB Statute, art 19.
54 See art 5.3 ECB Guidelines (n 52); also mentioned in art 3 of the Decision of the European Central Bank of 5 June 2014 on the remuneration of deposits, balances, and holdings of excess reserves, ECB/2014/23.
55 See art 5.3 ECB Guidelines (n 52).
56 According to art 128(1) TFEU in conjunction with art 10 and 11 of Regulation (EC) 974/1998, only banknotes and coins issued by the Eurosystem and denominated in Euro are deemed legal tender.
57 Christoph Keller, ‘Commentary on art. 17 ECB Statute N 16 seq.’ in Helmut Siekmann (ed), EWU Kommentar zur Europäischen Währungsunion (Mohr Siebeck, 2013).
58 See Section III in this chapter.
59 See eg Antonio Sáinz de Vicuña, ‘An Institutional Theory of Money’ in Mario Giovanoli and Diego Devos (eds), International Monetary and Financial Law: The Global Crisis (OUP, 2010) para 25.18; Roger Clews and Chris Salmon and Olaf Weeken, ‘The Bank’s Money Market Framework’ (2010) 50(4) Bank of England Quarterly Bulletin 292 <www.bankofengland.co.uk/quarterly-bulletin/2010/q4/the-banks-money-market-framework> accessed 19 August 2018; Ansgar Belke and Thorsten Polleit, Monetary Economics in Globalised Financial Markets (Springer, 2009) 24: ‘Reserves are assets for commercial banks but liabilities for the Fed: banks can demand payment on them at any time and the Fed is required to satisfy its obligation by paying Federal Reserve notes’.
60 For instance, the e-Peso that the Banco Central del Uruguay tested from November 2017 until April 2018 allowed for conversion at par between cash and e-Peso: see the presentation of Jorge Ponce, ‘Central Bank Digital Currencies: A Central Banker Perspective’ (7 June 2018) SUERF Conference, Milan <www.suerf.org/docx/l_d1c38a09acc34845c6be3a127a5aacaf_16719_suerf.pdf> accessed 6 August 2018.
61 See eg Directive 2009/110/EC of the European Parliament and Council of 16 September 2009, art 2(2), on the taking up, pursuit and prudential supervision of the business of electronic money institutions established a new legal basis for e-money issuance in the European Union. Under this set of rules, e-money is basically a claim on an issuer benefiting from an authorization or from a waiver, denominated in an official currency, issued on receipt of funds for the purpose of making payment transactions, accepted by persons other than the issuer, and convertible on demand to a fiat currency or to commercial bank money.
62 Cf. the Swiss Federal Council in its message regarding the new CPIA: ‘Botschaft zu einem Bundesgesetz über die Währung und die Zahlungsmittel (WZG)’ (26 May 1999) Swiss Federal Bulletin p 7258 et seq, 7270 (in German only) <www.admin.ch/opc/de/federal-gazette/1999/7258.pdf> accessed 30 August 2018.
63 Ludwig von Mises, The Theory of Money and Credit (Yale University Press, 1954) 50.
64 See CPIA, art 2 let a; art 3(1); art 2 let b; art 3(2) (cf n 25).
66 CPIA, art 2 let c (declaring ‘Swiss franc sight deposits at the Swiss National Bank’ to be legal tender).
69 Swiss National Bank Act of 3 October 2003 (NBA), OC 2004 p 1985, art 5(1)(b).
72 For instance, Germany’s central bank is changing its terms and conditions to provide for deeper scrutiny of the conversion of reserves to cash. The changes to its business conditions taking effect 25 August 2018 will not only ‘allow the Bundesbank to block cash transfers in the absence of assurances from those involved in a transaction that it doesn’t violate financial sanctions or rules to prevent money-laundering and the funding of terrorism’. A conversion can also be denied if this could possibly jeopardize ‘important relationships with third countries’ central banks and financial institutions’. Geir Moulson, ‘Germany Tightens Cash Transfer Rules as Iran Seeks Funds’ (4 August 2018) AP News <www.apnews.com/ebe8f3fc359246108fe8456978938b93> accessed 24 August 2018. Most probably, this will rapidly inspire other central banks to analogous regulations.
73 Basel Committee on Banking Supervision, ‘Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems’ (December 2010/June 2011) Banking for International Settlements 23 et seq, pt I.B.2 (definition of ‘capital’, ‘detailed proposal’, and ‘additional Tier 1 capital’), criteria 1–14 <www.bis.org/publ/bcbs189.pdf> accessed 24 August 2018.
74 In Switzerland, this rule has been implemented with art 27(1)b in connection with arts 18, 20, and 29 of the Swiss Capital Adequacy Ordinance of 1 June 2012.
75 See Basel Committee on Banking Supervision (n 73) 24, criteria 7–9.
77 David Bholat and Robin Darbyshire, ‘Central Bank Accounting’ in Peter Conti-Brown and Rosa Maria Lastra, Research Handbook on Central Banking (Edward Elgar Publishing, 2018) 314 et seq.
78 Swiss Code of Obligations (SCO), art 75, para 2 let a.
80 Miller v Race (1758) 1 Burr. 452, 457 et seq; 97 ER 398, 401 (KB).
81 See eg Regina v Thompson (1978) ECR 02247: The Court of Justice of the European Communities (ECJ) had to decide on the importation into the UK of South African gold coins (Krugerrands) and on the exportation from the UK of English silver alloy coins and whether the UK restrictions on movement of these group of coins were lawful. The ECJ held that Krugerrands are dealt with on money markets of some member-States as being equivalent to currency and therefore not goods in the sense of art 30 et seq of the EC Treaty. The opposite applied to silver coins as they are neither legal tender nor used as their equivalent in practice any longer.
However, the decision is marked by one peculiarity: the export ban for the silver coins was considered to be justified on the grounds of public policy (art 36 ECC) to prevent them from being melted down abroad in order to extract the pure metal from them; in its submissions to the Court, the UK Government had successfully claimed that the right to mint coins implies the interest to ensure that any profit resulting from any increase in the value of metal content of the coin accrues to the State rather than to an individual. As a result, under UK legislation, the State obviously enjoys (and perpetually keeps) a right akin to a property right in the coins. See Stefan Enchelmaier, ‘Article 36 TFEU: General’ in Peter J Oliver and others (eds), Oliver on Free Movement of Goods in the European Union (5th edn, Hart Publishing, 2010).
82 See The League of Nations (n 9).
83 Elizabeth Hennessy, A Domestic History of the Bank of England, 1930-1960 (Cambridge University Press, 1992) 153 et seq.
85 See eg Proctor (n 38) paras 1.36 and 1.46 with reference to the Bank of England’s ‘promise to pay’ on sterling banknotes.
87 It is an outstanding controversy among economists whether such central bank issued digital currency (CBDC) could be convertible or rather not in order not to avoid the risk of systemic bank runs. See eg Dirk Niepelt, ‘Reserves For All? Central Bank Digital Currency, Deposits, and their (Non)-Equivalence’ (July 2018) CEPR Discussion Paper no DP13065 <https://ssrn.com/abstract=3218462> accessed 19 August 2018 (endorsing convertibility) and Kumhof and Noone (n 43), strongly opposing.
88 See Section IV in this chapter.
89 See, in more detail, Zellweger-Gutknecht (n 70) para 14 et seq.
90 See eg Garreth Rule, ‘Centre for Central Banking Studies: Collateral Management In Central Bank Policy Operations’ (2012) Bank of England <www.bankofengland.co.uk/-/media/boe/files/ccbs/resources/collateral-management-in-central-bank-policy-operations> 16. To be precise, the collateral does not appear on the central bank’s balance sheet (but rather remains on the cash taker’s balance sheet, labelled as repo encumbered securities). If a commercial bank repos assets (eg a treasury bond) as a cash taker, then the central bank makes two entries on its balance sheet: it increases the reserves on the capital side and credits a claim on the commercial bank for repayment on the asset side. The asset (bond) serves as collateral for the claim. To this end, it is delivered by the central depository out of the custody account of the cash taker to the account of the cash provider (central bank).
91 See already Zellweger-Gutknecht (n 70) para 29.
92 Konrad Duden, Der Gestaltwandel des Geldes und seine rechtlichen Folgen (C. F. Müller, 1968) 7 n, 12a: ‘Der Gedanke, dass der Inhaber von Geld Mitglied einer Gemeinschaft sei, klingt an.’
93 Sáinz de Vicuña (n 59) para 25.07.
96 The term refers to the example first given by Milton Friedman, The Optimum Quantity of Money (Macmillan, 1969) 4.
97 This is commonly the practice for special drawing rights allocated by the IMF: the SDR are entered on the asset side whereas the counterpart pro memoria is booked on the passive side of the receiving central bank. See eg Helmut Siekmann, ‘Deposit Banking and the Use of Monetary Instruments’ in David Fox and Wolfgang Ernst (eds), Money in the Western Legal Tradition: Middle Ages to Bretton Woods (OUP, 2016) 489 et seq, 531.
98 Cf. eg Benjamin Geva, The Law of Electronic Funds Transfers (Matthew Bender Elite Products, 2017) 671, who correctly reminds us that bitcoin’s protocol is ‘not engraved in stone and is thus subject to change’.
99 See also the very critical view of economists at the BIS: Claudio Borio, Piti Disyatat, and Anna Zabai, ‘Helicopter Money: The Illusion of a Free Lunch’ (24 May 2016) VOX <http://voxeu.org/print/60605> accessed 19 August 2018.
100 SCC, art 930. For civil Law in general, see eg Thomas Glyn Watkin, An Historical Introduction to Modern Civil Law (Routledge 1999) 230. See also 1005 BGB; French Civil Code, art 2279; Spanish Civil Code, art 448; Civil Code of Liechtenstein art 509; and Austrian Civil Code, s 323, in conjunction with s 372.
101 SCO, art 728. See also German Civil Code, s 937; Austrian Civil Code, ss 1460; and 1463 in conjunction with 326; French Civil Code, arts 2258 and 2276; Spanish Civil Code, art 1940; Italian Civil Code, arts 1161 and 1163; and Spanish Civil Code, art 1940 et seq.
102 SCC, art 714 in conjunction with 922 et seq. See also German Civil Code, s 929, and Austrian Civil Code, s 1053. Under French law, however, the principle of consensus prevails (art 1196 and 1583) according to which transfer is executed by conclusion of contract. But towards third parties, the transfer of ownership will only be effective if possession is transferred: eg in a double sale the transfer is performed in favour of the first acquirer to obtain possession (art 1198).
103 Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA) of 11 April 11 1889, art 242(3).
104 See SCO, art 481 regarding the depositum irregulare of fungible goods.
105 SCO, art 165(1) in addition art 167 requires a notification of the debtor, otherwise payment made to the assignor in good faith will discharge the debtor. See also French Civil Code, art 1322.
106 Bruno Huwiler, ‘Begriff und Rechtswirkung: Sukzessionsrecht des Obligationenrechts von 1881’ in Pio Caroni (ed), Das Obligationenrecht 1883-1983 (P Haupt, 1984) 209–76 (in German only).
108 SCO, art 979(2): Defences based on the direct relations between the obligor and a former bearer are admissible where the bearer intentionally acted to the detriment of the obligor when acquiring the security.
109 See SCO, art 967(1). In addition, other instruments may require endorsement or further formalities.
110 See above, especially the main text between n 27 and 28.
111 Situations where defects (breach of duty etc.) affect the passage of legal title or give rise to claims will not be dealt with.
114 See eg decision of the Swiss Federal Tribunal 6B_994/2010 of 7 July 2011 consideration 126.96.36.199.
115 SBA, art 16, no 2, in conjunction with art 37d; for details cf. below para 4.76 et seq and especially n 146.
116 Proprietary interests in incorporeal money under common law will not be discussed. Cf in that regard David Fox, Property Rights in Money (OUP, 2008) ch 5.
117 See SCO, art 466, et seq, and eg decision of the Swiss Federal Tribunal 4C.149/2005 of 3 July 2006 consideration 2.1.
118 Fox (n 116) 5.04. See also Foskett v McKeown  1 AC 102, (HL), 127–28; Eliahu Peter Ellinger and Eva Z Lomnicka and Christopher VM Hare, Ellinger’s Modern Banking Law (5th edn, OUP, 2011) 300.
120 Benjamin Geva, ‘Payment Finality and Discharge in Funds Transfers’ (2008) 83(2) Chicago-Kent Law Review 632, 635 et seq.
121 SCO, art 402(1); see also Fox (n 116) 5.13.
124 See eg Peter Gauch, Walter R Schluep, and Susan Emmenegger, Schweizerisches Obligationenrecht, Allgemeiner Teil ohne ausservertragliches Haftpflichtrecht (10th edn, Schulthess, 2014) para 2314 (in German only).
126 See for an overview with further references Carl S Bjerre, ‘Intermediated Securities: Legal Problems and Practical Issues (Book Review)’ (2012) 27(4) Banking & Finance Law Review753, 755.
127 ibid 753 et seq (emphasis added).
128 See Uniform Commercial Code, s 8-503; Securities Transfer Act (2006) (Ontario), SO 2006, c 8, s 97.
129 Eva Micheler, ‘The Legal Nature of Securities: Inspirations from Comparative Law’ in Louise Gullifer and Jennifer Payne (eds), Intermediated Securities: Legal Problems and Practical Issues (Hart Publishing, 2010) 131 et seq.
130 It literally translates to mobile values and could first be found in the Budged 1982 Act no 81–1160 of 30 December 1981, Official Journal (OJ) of 31 December 1981, p 3539, 3555, art 94, para 2 of: ‘Les valeurs mobilières émises en territoirs français et soumises à la législation française, quelle que soit leur forme, doivent être inscrites en comptes tenus par la personne morale émettrice ou par un intermédiaire habilité’.
131 Real decreto legislativo no 4/2015 of 23 October 2015; OJ no 255 of 24 October 2015.
132 See Unidroit, Convention on substantive rules for intermediated securities (Geneva Securities Convention), adopted on 9 October 2009. So far, it has only been signed by Bangladesh and is—in the absence of two more signatories—not effective yet.
133 See Hague Conference on Private International Law, Convention on the law applicable to certain rights in respect of securities held with an intermediary (Hague Securities Convention), adopted on 17 January 2002 and effective as of 1 April 2017 after ratification of the third signatory state (Switzerland, Mauritius, United States).
134 Federal Act on Intermediated Securities (Federal Intermediated Securities Act, FISA) of 3 October 2008, Systematic Compilation of Federal Legislation (SC) 957.1, OC 2009 p 3577.
135 See FISA, arts 1–3. Even then, the entitlement model prevails if securities were first intermediated under this model: art 10 FISA provides that the account holder only receives the rights that the Swiss custodian received from the foreign custodian (nemo plus juris principle).
137 FISA, arts 24 et seq.
139 See already Corinne Zellweger-Gutknecht, ‘Vermögenswerte im Finanzmarktrecht: Das Ende aller dinglichen Prinzipien?’ in Tanja Domej and others (eds), Einheit des Privatrechts, komplexe Welt: Herausforderungen durch fortschreitende Spezialisierung und Interdisziplinarität, Jahrbuch Junger Zivilrechtswissenschaftler (Boorberg, 2008) 87, 94 et seq.
140 FISA, art 6, in conjunction with SCO, art 973a et seq.
141 SCO, art 973c(4), in conjunction with arts 165(1) and 11(2) and 13 et seq.
142 See DEBA (n 107) and Changmin Chun, Cross-border Transactions of Intermediated Securities: A Comparative Analysis in Substantive Law and Private International Law (Springer, 2012) 329.
143 FISA, art 4 deems that qualified custodians are banks, securities dealers, fund management companies, and central securities depositories (all prudentially supervised), as well as two public entities: SNB and Swiss Postal Service.
144 Cf. the Swiss Federal Council in its message regarding the Federal Act on Investment Funds (Investment Fund Act, IFA), Swiss Federal Bulletin 1965 III p 258, 291 (in German only).
145 Swiss Federal Act on Investment Funds (IFA) of 1st July 1966, OC 1967 p 115, art 17, later revised Act of 18 March 1994, OC 1994 p 2523, art 16, and today Federal Act on Collective Investment Schemes (Collective Investment Schemes Act, CISA) of 23 June 2006, OC 2006 p 5379, art 35.
146 Swiss Federal Act on Banks and Savings Banks (SBA), art 16 in conjunction with art 37d of: tangible assets and securities belonging to the depositor; tangible assets, securities, and claims which the bank safekeeps on behalf of the depositor as well as freely available delivery claims of the bank against third parties arising from spot transactions, completed forward transactions, collateral transactions, or issues for the account of depositors.
148 Swiss Stock Exchange and Securities Trading Act of 24 March 1995, art 36a; Swiss Federal Act on Swiss Mortgage Bond Institutions of 25 June 1930, art 42; Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (Financial Market Infrastructure Act, FMIA) of 19 June 2015, art 88.
150 For the very reason the rule now comprised in SBA, arts 16 and 37d, was initially meant to be added as a new art 242bis DEBA: see Beat Kleiner and Thomas S Müller, ‘Commentary on art. 16 para. 1’ in Dieter Zobl and others (eds), Kommentar zum Bundesgesetz über die Banken und Sparkassen (Schulthess, 2014) (in German only); Thévenoz Luc, ‘La fiducie, cendrillon du droit suisse: propositions pour une réforme’ (1995) Zeitschrift für Schweizerisches Recht II 253 et seq, II.E.2.
151 This is the case for uncertificated securities in the sense of SCO, art 973c: the obligor has to keep a book of uncertificated securities (para 2), whereby the assets are created on an entry in the book (para 3). The obligors do not enjoy any special credibility, entitlement and transfer of these assets, and follow the rules of simple debts (para 4).
152 SCO, art 973c(2) and (3).
156 The definition was given by Paul A Samuelson, ‘The Pure Theory of Public Expenditure’ (1954) 36(4) Review of Economics and Statistics 387, in his theory of public goods.
157 The criterion has its roots in a theory first put forward by James M Buchanan, ‘An Economic Theory of Clubs’ (1965) Economia 32(125) 1 et seq in order ‘to move one step forward in closing the awesome Samuelson gap between the purely private and the purely public good’ (p 1). A pure public good exhibits both non-rivalry and non-excludability.
158 Sebastian Lohsse, Reiner Schulze, and Dirk Staudenmayer, Trading Data in the Digital Economy: Legal Concepts and Tools (Nomos, 2017) 13 et seq, 15.
160 There exist no such data as ‘a’ bitcoin or ‘a’ satoshi, but rather an identifiable address with a balance. The balance corresponds to the aggregate of all unspent transaction outputs (UTXO): every value ever transferred to this address and not yet spent. Accordingly, a UTXO does not have a single alphanumeric identifier but is rather identifiable by its data profile: a set of data relating to each and every preceding transaction (outgoing address, time stamp, amount, etc.). Therefore, a fund transfer on the bitcoin blockchain does not lead to the ‘movement of any specific data but rather the UTXO of the sending address being replaced by a new UTXO on the receiving address (and, additionally, to a new UTXO on the sending address comprising the rest, if not the whole UTXO was spent).
162 Meisser, Meisser, and Kogens (n 155) n 7 et seq.
164 John R Willett, ‘MasterCoin Complete Specification vs. 1.0 (First Complete Specification)’ (31 July 2013) <https://sites.google.com/site/2ndbtcwpaper/MasterCoinSpecification.pdf> accessed 26 June 2018. For every bitcoin invested (by sending it to an indicated address on the blockchain) within a month’s time, one hundred mastercoins were received.
165 See the examples given by Pedro Franco, Understanding Bitcoin: Cryptography, Engineering and Economics (John Wiley & Sons, 2015) ch 4, 39 et seq; ch 8, 123 et seq; and ch 12, 183 et seq.
166 So far, only slides are available (University of Liechtenstein, ‘Blockchain-Gestz’ (21 June 2018) Vimeo <https://vimeo.com/276259921> accessed 20 July 2018) with the legal portion at 33:40–59:30. The law will define tokens, terms of the trusted technologies ecosystem, the minimum standards for service providers, and conditions of regulatory supervision. It will further address power of disposition (comparable to possession) and right of disposition (comparable to ownership) over a token, irrevocable and final transfer of tokens, and acquisition by good faith. Finally, it will comprise bankruptcy regulation and address conflict of laws.
167 Regarding the gradual historical development of the corporate personality of religious units, see eg Frederick Pollock, Frederic W Maitland, History of English Law Vol. 1 (Cambridge University Press, 1968) 497–500.
168 Shawn Bayern, ‘The Implications of Modern Business-Entity Law for the Regulation of Autonomous Systems’ (2015) 19 Stanford Technology Law Review 93.
169 Regarding American, German, Swiss and UK Law: Shawn Bayern and others, ‘Company Law and Autonomous Systems: A Blueprint for Lawyers, Entrepreneurs, and Regulators’ (2017) 9 Hastings Science and Technology Law Journal 135–62.
170 See, however, Committee on Legal Affairs (of the European Parliament), Report with recommendations to the Commission on Civil Law Rules on Robotics, 27 January 2017, 2015/2103 (INL); European Parliament, Resolution with recommendations to the Commission on Civil Law Rules on Robotics, 16 February 2017, P8_TA(2017)00 51, recom 59 let, f; Commission, Follow up to the resolution of 16 February 2017 on civil law rules on robotics, 16 May 2017, SP(2017)310. A very helpful legislative observatory can be found here: Legal Observatory, ‘Civil Law Rules on Robotics’ European Parliament <www.europarl.europa.eu/oeil-mobile/fiche-procedure/2015/2103%28INL%29?l=en> accessed 30 August 2018.
173 See eg art 69 et seq of the Swiss Merger Act of 3 October 2003: Legal entities and sole proprietorships registered in the commercial register may transfer all or part of their assets and liabilities to other private law corporate persons by means of a transfer agreement and an application for registration in the commercial register. Hence, the assets and liabilities specified in the transfer agreement pass to the acquiring corporate person automatically when the transfer of assets is registered in the commercial register.
176 It is worthwhile to mention that a growing number of start-ups raising money by ICOs are structured as Swiss foundations, limited liability companies, or as Delaware corporations. Ethereum, for instance, is run by a foundation seated in Switzerland (founded in February 2014 as a limited liability company governed by Swiss law and converted a few months later; see Swiss Central Business Name Index: www.zefix.ch). Ripple Inc. is a corporation registered in Delaware and headquartered in San Francisco, California. It is a wholly owned subsidiary. XRP II, LLC was incorporated in South Carolina on 1 July 2013 in order to engage in the sale and transfer of the fully pre-mined convertible virtual currency, XRP, to various third parties on a wholesale basis; see Financial Crimes Enforcement Network (FinCEN), Matter no 2015-05, Attachment A: Statement of Facts and Violations, 5 May 2015, paras 1, 3, and 22. Even NEM (an abbreviation for ‘New Economic Movement’), another issuer of a cryptocurrency not associated with a legal person at first, has, in July 2017, set up the NEM Foundation (NEM.io Foundation Ltd.), a company limited by guarantee (CLG) in Singapore, to represent the roof international organization; see NEM, ‘A Major Announcement’ (7 July 2016) NEM <https://blog.nem.io/a-major-announcement> accessed 30 June 2018. Therefore the missing identifiable legal issuer of a cryptocurrency is likely to be considered a problem of a rather temporary nature.