Money makes the world 90 ‘round, Liza Minnelli sang in the movie Cabaret in 1973. An even greater gift has come to financial lawyers, at least that’s what Simon Gleeson writes in the preface of his book The legal Concept of Money (OUP, 2018). Gleeson is a partner at Clifford Chance London, and the gift mentioned is the creation of virtual currency. In this clear and accessible book, the author is looking for answers how to treat such virtual currencies, while underway learning more about the money as it exists in today’s world.
In the Netherlands, as in the UK, the applicable banking and civil laws leave room for payment in money types, either physical or virtual, that do not derive their existence from the State. Examples are money issued by private individuals (e.g. soccer stadiums or holiday parks) that is tolerated by the State, although these means of payment are issued by a factual authority other than the State. The monetary means of money are determined by the law of the country of the currency in question (lex monetae). Court cases re private money in the Netherlands, however, are scarce. Courts of first instance in the Netherlands have decided that bitcoins are not ‘money’ in the meaning of legal Dutch tender and are not tolerated by the State. In an insolvency case (Koinz Trading) for the court in Amsterdam, early 2018, it was decided that an obligation to pay in bitcoins is regarded as a verifiable claim within the meaning of the Dutch Bankruptcy Act.
Gleeson’s book analyses the challenge of how money (including coins, notes, credit, and virtual currency) should be defined from both a legal and an economic perspective. During his journey he introduces elements of the laws of Australia, Canada, Ireland, New Zealand and the US. He re-examines money in its fundamental characteristics in this context. That brought the author to study Roman Law and to quasi-philosophical considerations, such as ‘Does Money ‘Exist’?’. The positive answer is the result of the identification of the role it plays in various transactions and to what extent, for example, cryptocurrencies and quasi-money are interchangeable with, analogous to, or different from traditional monetary systems. Evidently, rather civil law types of questions pass on, such as virtual currency as property or as a subject of a security right.
The emphasis, however, is on the role of money in the banking system and exploring how various currencies can be used as claims on financial institutions. Moreover, rather economical observations are taken into account when examining whether the systemic stability of the industry is threatened by non-traditional currency forms. In all, the book sheds light on the many intricacies of the subject the world cannot do without and is a vital contribution to the understanding money in its legal context.
Simon Gleeson, The Legal Concept of Money, Oxford University Press 2018. ISBN 978-0-19-882639-2
Book information via: www.oup.com
Note: this book I received free of charge from the publisher with the request to announce it or to review it on my blog at www.bobwessels.nl.