Earl Steve Stephens III | 2024 I.S. Symposium
Name: Earl Steve Stephens III
Title: Regulating The Digital Frontier: A Comparative Analysis Of Bitcoin Regulatory Policy In El Salvador And The Central African Republic
Major: Comparative Political Science
Advisors: Megan Wrobel; Jeffrey S. Lantis (second reader)
The increasing popularity of Bitcoin has had a significant impact on regulatory policies and national currency systems across the globe. In recent years, El Salvador, and the Central African Republic (CAR) have passed legislation to adopt Bitcoin as their national currency. This study examines the reasons behind the retention of this legislation in El Salvador and its repeal in the Central African Republic. The study is focused on answering the question: How did different regulatory approaches affect domestic innovation in El Salvador and the Central African Republic? To answer this question, four hypotheses were formulated to explore whether greater instances of corruption/ illegitimacy will lead to a lack of regulatory order or a lack of domestic innovation in each case. This study utilizes Mill’s (1843) Method of Difference to compare El Salvador and the Central African Republic, which share many similarities. The analysis creates variables from the literature and various database sources, including Transparency International’s Corruption Perceptions Index (CPI) 2022, The World Bank’s DataBank Worldwide Governance Indicator (WGI) 2023, and The Fragile States Index’s State Legitimacy Global Data Index (SLGDI) 2023 databases. The study aims to provide an in-depth understanding of the similarities and differences between these two countries and their respective governance structures by utilizing a coding system to translate quantitative information into qualitative results, providing insight into two cases. The findings partially confirm that corruption and illegitimacy may contribute to a lack of regulatory order. However, the findings rejected corruption and illegitimacy’s effects on domestic innovation, as the actual level exceeded initial projections in both cases. This research sheds light on the complex relationship between regulatory policy, corruption, illegitimacy, and domestic innovation in the context of Bitcoin adoption by sovereign nations.
Posted in Symposium 2024 on April 19, 2024.
