University of São Paulo: Digital money- research on cryptocurrencies opens a new field of study in law

Cryptocurrencies are virtual currencies that generally do not have a centralized organization. The arrival of the first brokers specialized in this technology in Brazil in the last decade generated a great movement in the search for investments, although there is no specific legislation for their operation in Brazil. If there are no laws to validate its use, why do people still trust them to the point of accepting them in exchange for goods and services?

In his doctoral thesis, researcher Daniel Steinberg investigated the legal aspects that provide some answers to this question. The work also addresses other parallel currencies, such as mumbuca, which is not a cryptocurrency, but electronic money adopted as a means of payment by the Municipality of Maricá, in Rio de Janeiro. According to the project’s supervisor, Professor Camila Villard Duran, from the USP Law School, Daniel’s thesis “inaugurates an interdisciplinary branch to think about currency”. The research received the Capes de Tese 2022 Award as the best in the area of ​​law and should be released as a book by next November.

According to Steinberg, Law acts on monetary practices in three ways: by consensual norms, by imposing norms and by instrumental norms. Taxes are established by laws. The real, for example, is the official currency of Brazil because the current law determines it. Article 43 of the Criminal Misdemeanors Law prohibits citizens from refusing to receive the amount in reais for services or products sold in the national territory, since the real is the legal tender.


Instrumental norms are specific to private law, such as those provided for in the Civil Code. They depend on contracts with the agreement of the parties involved. Consensual norms, in turn, are not in state legislation, but are important to regulate social relations. “It may be that they are even written in the code of ethics of the community association, for example, but they are not part of public and private state law”, explains Daniel.

Consensual norms are important for the implementation of parallel currencies, since no Brazilian is obliged to accept any currency other than the real. For this reason, they may have greater or lesser strength in some social groups. The research found a gender segment in which the solidarity economy is more present: in Maricá, most people who use mumbuca are women.

In the case of cryptocurrencies, user trust is related to the security provided by blockchain technology , which is a database that authenticates transactions. A decentralized currency needs 80% to 90% of users to accept transactions, which varies according to the protocol of each network.

Professor Camila Duran, who supervised the project, points out that the Securities and Exchange Commission (CVM) establishes parameters to classify some cryptocurrency issues as a security, but there is still no regulation of the brokerages that work with them. Virtual currencies can be very useful for the population, but there is a lack of mechanisms to prevent crimes such as money laundering.



Mumbuca social currency
Law No. 12,865, of 2013 , created the concept of electronic money. Although it does not mention community banks, electronic money was the way in which the social currencies of these banks were created, as in the case of Banco Mumbuca.

The great advantage of having community banks with their own currency is that their use is restricted to a specific location. Mumbuca, for example, is only accepted within the municipality of Rio de Janeiro. “This allows the wealth of the city to circulate more among the residents of Maricá”, highlights Daniel.

More than 40 thousand people receive in Mumbuca through the assistance of the Citizenship Basic Income Program (RBC). Convincing work is essential, as the law says that merchants can refuse this type of payment.

Unlike social currencies, the great advantage of cryptocurrencies is their international reach. “This allows a migrant to make remittances to their country of origin, for example,” adds Daniel. However, with the exception of the inhabitants of El Salvador, where bitcoin (the world’s first decentralized cryptocurrency) is legal tender, no one is obliged to accept it as a form of payment.



A topic to be explored
The theme of money is little explored in the legal sciences. Decades ago, jurists such as the American Arthur Nussbaum (1877-1964) and the Brazilian Arnoldo Wald studied how the law should deal with the loss of value of coins, which is a frequent question when signing a contract. After the 1980s, the matter was left to economists, as no other relevant legal problems arose. However, the debate now needs to be resumed due to the emergence of other forms of money.


The research was carried out through questionnaires answered by users of these coins. In addition to this step, Daniel made a historical review of how the currency was treated by jurists since the 13th century. The researcher explains that there was a coexistence of private and state currencies in a disorganized way until the 19th century . From the second half of the 19th century onwards, when nation-states were constituted, there was a process of centralization. At this stage, mandatory state currencies emerged and private currencies became less important or ceased to exist.

In the late 20th century and early 21st century, new parallel currencies were created with the help of new technologies, but this time, legal mechanisms were created for them to coexist with state currencies, which is precisely the subject of the study.

The work was discussed in some research groups, such as the Center for Banking Law (CDB) at USP, of which Daniel is a member. A book with the results of the research will be published in November by the publisher Lumen Juris.