Introduction to the Regulation of Digital Asset Currencies
Posted: 3 Apr 2018 Last revised: 25 Apr 2019
Date Written: March 28, 2018
Abstract
This paper introduces the complexities of regulating digital asset currencies. A cryptocurrency is a decentralised stored value and digital medium of exchange which uses cryptography to secure and verify transactions. Cryptocurrency is highly secure. Bitcoin or Litecoin may be considered cryptocurrency as they are based on cryptography and can represent stored value. These cryptocurrencies are typically not managed by a central body or government. A digital token (or crypto coin), on the other hand, is an encrypted digital asset which can embody a tradeable good. Some coins may reflect the behaviour of securities, whereas others may provide a use or a service to the owner. Digital or crypto coins are created through Initial Coin Offerings (ICOs) and are usually hosted on another currency's block chain.
Keywords: cryptocurrency, regulation, ICO, initial coin offering
JEL Classification: G28
Suggested Citation: Suggested Citation