Regulatory perspectives on virtual currencies

Source: Cobden Centre
by Sean F Ennis & Gert Wehinger

“Unlike currencies issued by central banks, virtual currencies are not backed by the full faith and credit of a monetary authority, nor are they governed by a regulation that, for example, mandates their acceptance as a means of exchange or restricts private issuance. However, as long as the expectation of a purchaser is that others will accept the virtual currency as a store of value, they may be willing to purchase it. The existence of non-governmental stores of value or mediums of exchange is not new, but these have normally restricted use, such as frequent flyer miles or store vouchers. One major difference between these and virtual currencies is the ease with which the virtual currencies can be transformed back into legal tender currency, mainly, but not exclusively, through a number of exchanges and trading platforms that perform this conversion.” (09/06/17)