Abstract
Blockchain technology ushered in by the Fourth Industrial Revolution is transforming many sectors of the economy. Central to this study, blockchain has enabled the emergence of cryptocurrencies such as Bitcoin, Ethereum, Dogecoin amongst numerous cryptocurrencies in circulation across the world. The proliferation of cryptocurrencies that are privately operated and the risks posed by such parallel financial and monetary systems has prompted governments to consider measures such as adopting cryptocurrencies as legal tender or launching cryptocurrencies known as stable coins which are backed by commodities such as gold. On the other end of the spectrum, over 100 countries across the world are in the process of developing central bank digital currencies (CBDCs). Nigeria is the very first country in Africa to adopt a CBCD, the eNaira, in October 2021. The anonymity and decentralized nature of cryptocurrencies have rendered them a vehicle of choice in money laundering, terrorist financing, and corruption schemes whilst being capable of evading authorities due to the non-existence of intermediaries through which the government can regulate transactions. Digital currencies represent a new class of technology. They are not used as tools to transport money, but are arguably money itself, in the sense that they are used as a means of payment for goods and services. Unlike central bank digital currencies, cryptocurrencies pose significant regulatory risks due to anonymity and decentralized nature aggravated by the absence of government control of the blockchain system. At this point, many governments are battling with how to legally classify cryptocurrencies within their economies. This dissertation aims to investigate, whether and to what extent current legal frameworks in different jurisdictions make sufficient provision for cryptocurrencies issued by states. This dissertation further investigates the possibility of countries issuing digital currencies, mainly focusing on the legal implications. Further, this study investigates the successes and challenges faced by countries that issued digital currencies. In the ultimate, this study examines South Africa’s position regarding issuing a digital currency.