Virtual currencies

Vessio, Monica

Abstract

The digitisation of the financial services industry is transforming the value chain of banks and financial services providers. Legacy business models are being tested by new industry players – “fintechs” and “big techs”. The private sector is pushing the product offering boundaries through digital modernization and the legacy players as well as Governments need to meet the challenge or be left behind.
Virtual currencies, in their myriad of potential forms, will form an integral part of this infrastructure reboot. Whether through integration and regulation of the conventional decentralised virtual currencies in the payment system retail bank issuances of stablecoins or through central bank digital currencies. Virtual currencies are the wave of the future for payment systems but left unchecked provide a powerful new tool for criminals, terrorist financiers and other sanctions evaders to move and store illicit funds, out of the reach of law enforcement and other authorities.
To understand how virtual currencies can be regulated, one needs to define and classify them, based on their observed characteristics, international reports, reports by other jurisdictions as well as actions taken by governments. It is submitted that because of the yet unchartered landscape, these definitions may be subject to change and, as regulations both globally and locally develop, updated. This chapter looks at these issues.

• Online Publication Date: Jun 1, 2020
• Publication Date: Jun 1, 2020
• Deposit Date: Oct 28, 2020
• Book Title: Banking Law and Practice
• Chapter Number: 40
• Keywords: digital currencies, digital assests cryptoassets, CBDC, South Africa, payment system
• Public URL: https://uwe-repository.worktribe.com/output/6819341