Research and Development in Public Law

Research and Development in Public Law

Cognitive Challenges in Regulating Cryptocurrencies and Crypto Assets and How They May Be Mitigated

Document Type : Original Article

Authors
Behrad Saghiri 1
Yaser Moradi 2
1 Chair of the Law Department, Nabi Akram University; Ph.D in International Trade and Investment Law, Faculty of Law, Shahid Beheshti University.
2 Ph.D. in Private Law, Mofid University, Qom
10.22034/jrpl.2025.2073575.1185
Abstract
In recent decades, the widespread development of blockchain technology and the emergence of cryptocurrencies and crypto-assets have made regulation—in both its general sense of governance and its specific sense of rule-making—an unavoidable necessity. This technological phenomenon has not only transformed financial and economic systems but has also reshaped the traditional legal foundations of ownership, value, credit, and trust. Consequently, it calls for a comprehensive rethinking, conceptual clarification, and a new regulatory perspective capable of addressing the interdisciplinary and rapidly evolving nature of this field. However, entering such a complex and technologically driven domain without adequate epistemic preparedness has given rise to significant epistemological errors—errors that ultimately lead to policy failure, regulatory inefficiency, and the ineffectiveness of enacted rules. Employing a descriptive–analytical method with a critical approach, this study seeks to answer the following question: what are the main epistemological errors in the regulation of cryptocurrencies and crypto-assets, what are their implications for regulatory outcomes, and what solutions can be proposed to overcome them? The findings indicate that regulators’ limited understanding of the nature and logic of blockchain technology, inconsistencies in defining regulatory objectives, and errors in selecting appropriate tools and standards constitute the fundamental sources of these challenges. Such cognitive deficiencies often result either in overregulation, which hinders innovation and economic growth, or in underregulation, which produces instability, uncertainty, and informational asymmetry in emerging markets. In Iran, these challenges are manifested through regulatory silence, whereby the absence of coherent strategies and policy frameworks has led to a passive stance among regulatory bodies, and even recent legislative initiatives such as the new Central Bank Law have failed to close this gap. Ultimately, the paper argues that adopting flexible and neutral international standardization frameworks, alongside the use of regulatory sandboxes with an educational function for regulators, can serve as an effective, sustainable, and forward-looking model for reducing epistemological errors and improving the quality of regulation in emerging technological domains.
Keywords
Regulation
Cryptocurrencies
Crypto Assets
Regulatory Failure
Blockchain
Subjects
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Research and Development in Public Law
Volume 2, Issue 4 - Serial Number 4
February 2026
Pages 217-245