The mechanism of credit transfers via the Blockchain
Liudmila G. Efimova · International Accounting · 2020
Subject. Money transfers via Blockchain-based banking and payment systems employ a procedure combining the traditional mechanism of gross settlements and P2P network, which is also run with the Blockchain. Therefore, the relationship between payment peers is mixed too. Objectives. The study aims to set up a legal mechanism of credit transfers which synergistically combines two payment procedures, i.e. traditional gross settlements via the national banking system and P2P payments based on the Blockchain. Methods. The study relies upon systemic-structural, dialectical, logic methods, induction, deduction, legal forecast, legal modeling and comparative method (legal comparison). Results. I examine how advantages of Blockchain-based payment systems and banking payment systems can be combined. This will streamline and smooth settlements, allowing to use the fiat currency in the beginning and at the end of credit transfers. The article highlights four phases of a mixed money transfer, i.e. the preliminary creation of a Blockchain-based node, accession to the protocol, opening of cryptocurrency accounts and e-wallets; the commencement of a money transfer under traditional rules of payment laws; interbanking settlements via the Blockchain and crediting of money under ordinary rules of the payment laws. Conclusions and Relevance. When credit transfers migrate from conventional bank accounts to the Blockchain, the fiat currency converts into the cryptocurrency and vice versa. I analyzed types of social relations emerging through the above phases and sources of legal regulations. The findings can be used in the theory of civil and banking laws, law making processes for the preparation of regulatory documents on cashless payments, and IT regulations.