virtual currency , or virtual money , is an unregulated type of digital money, issued and usually controlled by the developer and used and received among certain virtual members of the community. The US Commodity Futures Trading Commission has warned investors against pumping and disposal schemes that use virtual currency. The Financial Crimes Enforcement Network (FinCEN), the US Treasury bureau, defines the virtual currency in its guidance published in 2013. In 2014, the European Banking Authority defines the virtual currency as "a digital representation of value not issued by a central bank or public authority , not always attached to fiat currency, but accepted by natural persons or the law as a means of payment and may be transferred, stored or traded electronically ". In contrast, the digital currency issued by the central bank is defined as the "digital currency of the central bank".
Video Virtual currency
Definition
In 2012, the European Central Bank defines the virtual currency as "an unregulated type of digital money, published and usually controlled by its developers, and used and accepted among certain virtual community members".
In 2013, the Financial Crimes Enforcement Network (FinCEN), the US Treasury bureau, differs from the rules that define currency as "coins and banknotes of the United States or other countries that [i] are designated as valid payment instruments and [ii] circulate and [iii] Usually used and accepted as a medium of exchange in the issuing country ", also called" real currency "by FinCEN, the virtual currency is defined as" a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency ". In particular, the virtual currency does not have a valid tender status in any jurisdiction.
In 2014, the European Banking Authority defines the virtual currency as "a digital representation of value not issued by the central bank or public authority, not always attached to fiat currency, but accepted by natural persons or the law as a means of payment and can be transferred , stored or traded electronically ".
Maps Virtual currency
History of the term
At the 2013 congressional hearing on virtual currency, Ben Bernanke said they "have been seen as a form of 'electronic money' or payment systems technology that has evolved over the last 20 years", referring to the congress session 1995 on the Future. Money before the Committee on Banking and Financial Services. The currency of Internet Flooz was made in 1999. The term "virtual currency" seems to have been created around 2009, in line with the development of digital currencies and social games.
Although the correct classification is "digital currency", the US government prefers and uniformly adopts the term "virtual currency". The Fincen US Treasury was the first, followed by the FBI in 2012, the General Accounting Office in 2013, as well as the government agency that testified to the US Senate hearing in November 2013 on bitcoins, including the Department of Homeland Security, the Securities and Exchange Commission, the Office Attorney General's Office.
Limit on currency
The attributes of real currency, as defined in 2011 in the Code of Federal Regulations, such as real paper money and real coins are simply that they act as a legitimate and outstanding "customary" payment instrument.
The IRS decided in March 2014, to treat bitcoins and other virtual currencies as property for tax purposes, not as currency. Some people suggest that this makes bitcoin unequal - that one bitcoin is not identical to another bitcoin, unlike a gallon of crude oil that is identical to another gallon of crude oil - making bitcoin does not work as a currency. Others have stated that the size of such an accounting on the basis of the average cost will return the fungibility to the currency.
Categorization by currency flow
Closed virtual currency
The virtual currency has been called "closed" or "fictitious currency" when they have no official connection to the real economy, for example, the currency in the game of massive online roles like World of Warcraft. While there may be a gray market to exchange currencies or other virtual assets for real-world assets, this is usually prohibited by the terms of the game service.
Virtual currencies with currency flows in one direction
This type of currency has been known for a long time in the form of customer incentive programs or loyalty programs. The first known coupon in history may come from the US, associated with Asa Candler, Coca-Cola's inventor and free drinking coupon in 1887, followed by a one-cent-off CW Post coupon in a breakfast cereal box in 1895, both to move sales. The business issues a voucher function as a central authority. Coupons remained unchanged for 100 years until new technologies that enabled credit cards became more common in the 1980s, and credit card rewards were created. Recent incarnations are driving increased Internet commerce, online services, online community development, and games. Here a virtual currency or game can be bought, but not converted back into real money. The virtual currency is the same as the coupon. Examples are frequent flyer programs by various airlines, Microsoft Points, Nintendo Points, Facebook Credits, Ven (currency) and Amazon Coin.
Convertible virtual currency
The virtual currency that can be bought and resold for a legal tender is called a currency that can be converted. This can be decentralized, such as bitcoin.
Centralized and decentralized virtual currency
FinCEN defines a centered virtual currency in 2013 as a virtual currency that has a "centralized repository", similar to a central bank, and "central administrator".
A decentralized currency is defined by the US Treasury as "currency (1) which has no central repository and no single administrator, and (2) that people can get with their own computing or manufacturing efforts". Rather than relying on trust in the central authority, it depends on a trust distribution system.
Money matrix
Digital currency is a form of a particular currency that is transferred and stored electronically, that is, different from the physical currency, such as coins or banknotes. According to the European Central Bank, virtual currencies are generally "digital", although their perennial precursors, coupons, for example, are physical.
Cryptocurrency is the digital currency using cryptography to secure transactions and to control the creation of new currency units. Since not all virtual currencies use cryptography, not all virtual currencies are crypto currency. Cryptocurrency is generally not valid. Ecuador was the first country to try the government to run the digital currency -no cryptocurrency; during the introductory phase of Christmas Eve 2014 to mid February 2015 people can open accounts and change passwords. At the end of February 2015, electronic money transactions will be possible.
Rule
Virtual currency poses challenges for central banks, financial regulators, ministries or finance ministries, as well as fiscal authorities and statistical authorities. Gareth Murphy, Central Bank of Ireland, illustrates the regulatory challenges posed by virtual currencies associated with:
- Economic statistics
- Monetary and exchange rate policies
- Tax leak
- Payment system and residential infrastructure
- Consumer protection
- Anti money laundering
- Impact of financial regulation on financial service providers
US Treasury Guide
On March 20, 2013, the Financial Crimes Enforcement Network issued a guide to clarify how the US Bank Secrecy Act applies to people who create, exchange and transmit virtual currencies.
Guide of the Securities and Exchange Commission
In May 2014, the US Securities and Commerce Commission (SEC) "warned of the dangers of bitcoin and other virtual currencies".
New York state regulation
In July 2014, the New York State Department of Financial Services proposed the most comprehensive virtual currency regulation to date that is commonly referred to as BitLicense. Unlike US federal regulators, it has collected input from bitcoin supporters and the financial industry through public hearings and comment periods until 21 October 2014 to adjust the rules. The proposal, per the NY DFS press release "... seeks to strike the right balance that helps protect consumers and eradicate illegal activity". It has been criticized by small companies to support established institutions, and Chinese bitcoin exchanges have complained that the rule is "too broad in its application outside of the United States".
See also
- Alternative currency
- Virtual stuff
References
External links
- Virtual Currency: Challenges of Investigation and Opportunity (FBI)
Source of the article : Wikipedia
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