Legally Speaking, is Digital Money Really Money? – IMF Blog

Legally Speaking, is Digital Money Really Money? – IMF Blog
— Read on

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Digital currencies came into existence about five years ago. I was first approached about it by a guy whom I thought was blindly passionate about a fallacious investment. Nothing I said could dissuade the guy. I flatly refused his invitation to join as I shook my head and watched him walked away disappointed. That was five years ago. Today, I’m still skeptical about the quasi-investment. When I received this blog, I thought it was a topic worth sharing.

. . .

“Cryptocurrencies are not legal tender in any jurisdiction; they, unlike the conventional currencies issued by a monetary authority, are not controlled or regulated and their price is determined by the supply and demand of their market.” – The Law Library of Congress

Click here for the Law Library of Congress’s full report on regulation of cryptocurrency.

  • What is the origin of digital currency?
  • Who started or created them?
  • If they are not legal tenders, fully acceptable in the general markets, why do people put so much into them?
  • They have no intrinsic value; neither are they backed!

According to Corporate Finance Institute, “The value of a virtual currency is mainly driven by the sentiment of traders.”

Per Scott-Briggs, there are ten (10) digital currencies:

  1. Ethereum
  2. Ripple
  3. Litecoin
  4. Dash
  5. Peercoin
  6. Dogecoin
  7. Primecoin
  8. Chinacoin
  9. Ven
  10. Bitcoin

However on further research, and much to my surprise, I found that there were much more. I stopped loading more after I got to 600!

I also could not find any government/country that has accepted digital currency as its legal tender. Click here to see various countries’ regulations on digital currency.

Finally, Joseph Stiglitz, Nobel Laureate in Economics in 2001 and former Chief Economist of the World Bank, has this to say about digital currencies; “The real reason why people want an alternative currency is to participate in vile activities.” “What we really should do,” he said, “is to demand the same transparency in financial transactions with bitcoins that we have with banks.” If this were to be done, he believes, the bitcoin market “would simply collapse.”

. . .

Folks, what are your stand on digital currencies? Are you trading in them and do you think that they are the currency of the future?

Thanks for reading.

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