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Virtual Currencies

In general, a virtual currency (VC) is a type of electronic, digital money. Unlike checking accounts and e-Money services, which are also electronic, VCs are largely unregulated, created independently from nations’ central banks, disengaged from customary financial institutions, without borders, and lacking any implicit or explicit government guarantees as to their acceptability (e.g., legal tender) or value. A VC can have varied and numerous features, focuses, and functions. Because hundreds of them exist, there is no internationally recognized and accepted VC definition. The most commonly used descriptions are from the Financial Crimes Enforcement Network (March 2013), Financial Action Task Force (June 2014), and European Banking Authority (July 2014).

Closed and Open VCs

VCs can be put into two generic classifications: closed and open.

Closed VCs

Closed VCs, such as ...

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