“Virtual currency is here to stay”, according to a partner at one of the largest and most prestigious law firms in the US.
Judith Alison Lee, partner in the Washington, DC, office of global law firm Gibson, Dunn & Crutcher, was a panellist in the company's webinar on virtual currencies, which took place earlier this week.
Lee, who is also co-chair of the firm's International Trade Practice Group, said she isn’t putting all her faith in bitcoin as the virtual currency that succeeds over any other, but she does believe digital currency isn’t just a fad.
“We think this type of technology, this method of payment, has so many advantages over fiat currency. It's unlikely to completely go away,” she explained.
According to Lee, Gibson Dunn is also interested in other applications of bitcoin’s underlying technology, the blockchain, and she sees many applications other than currency coming to the fore this year.
“We think that some of the most interesting applications, from a legal perspective, are the potential use of blockchain technology for smart contracts, securities, property registers, IP and the storage of other data,” she told CoinDesk after the webinar.
What the future holds
Speaking about what else 2015 has in store for the digital currency space, Lee said she is certain there will be continued growth and acceptance by large mainstream retailers.
However, she believes it is likely there will also be more headlines centered around price volatility, security breaches and bitcoin’s use in illicit activities.
With this in mind, Lee is confident more regulation related to digital currency will be created in the near future:
“We do think there is going to be increased regulation at both the federal and state level … especially in New York, where you have a very active and aggressive regulator.”
Regulation in the US
Arthur Long, partner in Gibson Dunn’s New York office – one of 18 across the globe – also took part in the webinar and spoke specifically about regulation in New York State and across the nation.
He said the state’s proposed BitLicence shows that “New York really wants to reach out and firmly establish control over virtual currencies”, adding that he believes many other states will follow the same approach.
He told CoinDesk:
“I expect, however, that the pace of state regulation will differ by jurisdiction, and we will not see rapid implementation of 50-state schemes like New York’s. That said, New York’s will be influential, and given the reach of the scheme, it will likely require many out-of-state companies to be licensed in New York.”
Long, who is also co-chair of the Financial Institutions Practice Group at Gibson Dunn, believes this will slim down the number of players in the space, resulting in a only a handful of regulated exchanges operating in the US.
“I think this will mean participants with the most financial backing and the most ability to deal with multiple regulatory requirements will come out on top over the next few years,” he said.
Interest in the technology
Jeffrey Steiner, counsel in Gibson Dunn's Washington, DC, office, rounded off the webinar by discussing the general attitude the firm's clients have towards digital currency.
He said many have expressed a desire to learn more about how digital currencies and blockchain technology can work in the context of their business operations.
“There's certainly a lot of interest,” he concluded.