Abstract
We commence the text with an introduction to the latest technological innovations in financial transactions, namely, the development of virtual currencies as exemplified by Bitcoin. The question arises concerning the nature of money with a brief historical overview followed by the reasons for the advent and rise of virtual currencies We examine the types of virtual currencies, the key actors that constitute the innovations, and the benefits and risks thereof in substantial detail. We close with the views expressed by two Nobel laureates of economics.
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New York Title 23, Ch. I, Part 200.2 defines “virtual currency” as follows:
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(p) Virtual Currency means any type of digital unit that is used as a medium of exchange or a form of digitally stored value. Virtual Currency shall be broadly construed to include digital units of exchange that (i) have a centralized repository or administrator; (ii) are decentralized and have no centralized repository or administrator; or (iii) may be created or obtained by computing or manufacturing effort. Virtual Currency shall not be construed to include any of the following:
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(1) digital units that (i) are used solely within online gaming platforms, (ii) have no market or application outside of those gaming platforms, (iii) cannot be converted into, or redeemed for, Fiat Currency or Virtual Currency, and (iv) may or may not be redeemable for real-world goods, services, discounts, or purchases.
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There are numerous definitional sources. A primary one relied upon herein is The Financial Action Task Force (FATF), Virtual Currencies: Key Definitions and Potential AML/CFT Risks, Jun. 2014, http://www.fatf-gafi.org/media/fatf/documents/reports/Virtual-currency-key-definitions-and-potential-aml-cft.pdf
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Id.
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USDT (tether) is a cryptocurrency asset that is issued on the Bitcoin blockchain, each unit of which is secured by a U.S. dollar held by Tether Limited Reserves and redeemable through the Tether Platform. It is transferable and can be stored and spent like Bitcoin and other cryptocurrencies. Antonio Madeira, What is USDT and how to use it, Cryptocompare, Sept. 28, 2017, https://www.cryptocompare.com/coins/guides/what-is-usdt-and-how-to-use-it
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Girasa, R. (2018). The Digital Transformation. In: Regulation of Cryptocurrencies and Blockchain Technologies. Palgrave Studies in Financial Services Technology. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-78509-7_1
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