By
Mayowa Adebajo
February 23rd, 2024
The District of Columbia becomes the fourth jurisdiction after New York City, North Carolina, and Nebraska that will accept digital currency payments. It’s a huge move to crypto adoption.
The world’s financial system is experiencing a rapid transformation with digital currency infiltration. Cryptos facilitate a relatively swift monetary transaction particularly when sending money across borders, they favor direct peer-to-peer method which reduces the cost of charges levied by overseeing financial institutions. A recent development in the growing drive for the adoption of crypto comes with the approval by the District of Columbia Bar to allow its lawyers to accept cryptos as a form of payment.
This move is an attestation to the growing need for the legal entity to recognize the importance of digital currencies in today’s financial ecosystem. The District of Columbia is the fourth jurisdiction to allow this form of payment besides New York City, North Carolina, and Nebraska.
Addressing Ethical Concerns
The question of ethics remains a substantial one owing to the cryptographic nature of cryptocurrencies which can mask the identities of parties making the transaction. The earliest reason for the rebuff was connected with the potential to facilitate illicit transactions.
As reiterated by the ethics opinion:
“It is not unethical for a lawyer to accept cryptocurrency in lieu of more traditional forms of payment, so long as the fee is reasonable. A lawyer who accepts cryptocurrency as an advance fee on services yet to be rendered, however, must ensure that the fee arrangement is reasonable, objectively fair to the client, and has been agreed to only after the client has been informed in writing of its implications and given the opportunity to seek independent counsel.”
With the go-ahead given by the DC Bar on the acceptance of cryptocurrencies, a new financial autonomy has been handed over to clients which may favor a more increased adoption of digital currencies.
Conditions Precedent
The DC Opinion revealed that cryptocurrencies represent “a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value” and transactions involving this are best related to trade by barter, the exchange of digital assets for the payment of legal services fees. Similar modes of payments include but are not limited to properties and shares of corporate stocks.
Lawyers who accept an advance retainer in crypto are subject to ethics rule 1.8(a), which requires a reasonable agreement with terms that have been explained in writing and must be fair to the client. Under the provisions of rule 1.8(a), a lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client unless the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner which can be clearly understood.
The customers are given an opportunity to seek the advice of independent counsel in the transaction and consent in writing thereto.
Mainstream Crypto Adoption
The drive to create a new financial world order is currently being supported by the government as well as institutions whose involvement with cryptocurrencies has increased over the past few years. While there’s growing adoption of crypto by American banks, a study by Fidelity Digital Assets has shown that institutional adoption of cryptocurrencies and blockchain has soared 80%. With government backing and strides like those from legal bodies as The District of Columbia Bar, cryptocurrencies adoption will be enhanced.