Cryptocurrency: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Add quote - source - Bank of England - https://www.bankofengland.co.uk/research/digital-currencies) |
imported>Doug Williamson (Add quote - source - The Treasurer - March 2023, p20.) |
||
| (11 intermediate revisions by the same user not shown) | |||
| Line 1: | Line 1: | ||
A cryptocurrency is a virtual digital currency based on cryptography and peer-to-peer networking, for example Bitcoin. | A cryptocurrency is a virtual digital currency based on cryptography and peer-to-peer networking, for example Bitcoin. | ||
Sometimes known as 'crypto-assets', also written ''cryptoassets''. | Sometimes known as 'crypto-assets', also written ''cryptoassets''. | ||
Regulators and some commentators prefer these terms, as a reminder that cryptoassets are not currencies in the traditional sense. | |||
| Line 10: | Line 13: | ||
:Cryptoassets combine new payments systems with new currencies that are not issued by a central bank... | :Cryptoassets combine new payments systems with new currencies that are not issued by a central bank... | ||
:Our Financial Policy Committee has assessed cryptoassets and concluded that they do not currently pose a risk to monetary or financial stability in the UK. However, cryptoassets do pose risks to investors and anyone buying cryptoassets should be prepared to lose all their money. | :Our Financial Policy Committee has assessed cryptoassets and concluded that they do not currently pose a risk to monetary or financial stability in the UK. However, cryptoassets do pose risks to investors and anyone buying cryptoassets should be prepared to lose all their money... | ||
:HMT’s proposed approach [is] for an overarching framework to bring crypto-assets into the scope of activities that are regulated – the ‘regulatory perimeter’." | :HMT’s proposed approach [is] for an overarching framework to bring crypto-assets into the scope of activities that are regulated – the ‘regulatory perimeter’." | ||
:''Bank of England - CBDC versus cryptocurrency'' | :''Bank of England - CBDC versus cryptocurrency.'' | ||
:<span style="color:#4B0082">'''''Case for cryptocurrency is weaker than for blockchain'''''</span> | |||
:"The use case for cryptocurrencies – from providing an alternative to expensive and entrenched traditional finance to enabling anonymity and an escape from government-held monopolies – seems feebler after the many scandals and frauds that have plagued the sector. | |||
:The idea that cryptocurrencies are an inflation hedge, which is supposed to work thanks to crypto’s limited supply, took an especially hard beating. | |||
:It turns out that not only do cryptos not hedge against inflation, but they act as a typical risk asset, so are extremely cyclical – the demise of the sector has been very similar to the wider tech sector pullback. | |||
:... the economics use case for cryptocurrencies is not to be confused with the use of blockchain technology. | |||
:Solving an important economic problem – that of trust between contractual counterparties – blockchain is probably here to stay, especially after improvements in its appalling energy inefficiencies. | |||
:It’s true that commercial blockchain technology applications have also experienced several significant drawbacks lately. | |||
:But this seems more a part of a wider tech downcycle, which blockchain is likely to survive – especially as computing power gets cheaper still." | |||
:''Tamara Basic Vasiljev, Senior Economist, Oxford Economics - The Treasurer, March 2023, p20.'' | |||
| Line 22: | Line 45: | ||
* [[Bitcoin]] | * [[Bitcoin]] | ||
* [[Blockchain]] | * [[Blockchain]] | ||
* [[Central bank digital currency]] | * [[Blockchain Governance Initiative Network]] (BGIN) | ||
* [[ | * [[Central bank digital currency]] (CBDC)) | ||
* [[Centralised finance]] (CeFi) | |||
* [[Cryptoassets]] | |||
* [[Cryptocurrency mining]] | |||
* [[Cryptography]] | * [[Cryptography]] | ||
* [[Currency]] | |||
* [[Decentralised finance]] (DeFi) | |||
* [[Digital currency]] | * [[Digital currency]] | ||
* [[Ether]] | * [[Ether]] | ||
| Line 34: | Line 62: | ||
* [[Money]] | * [[Money]] | ||
* [[Non-fungible token]] | * [[Non-fungible token]] | ||
* [[Peer-to-peer]] | |||
* [[Regulation]] | |||
* [[Ripple]] | * [[Ripple]] | ||
* [[Virtual currency]] | |||
==Other resources== | |||
[https://www.bankofengland.co.uk/research/digital-currencies Central bank digital currencies - Bank of England] | *[https://www.treasurers.org/hub/treasurer-magazine/cryptocurrencies-why-some-more-volatile-than-others Cryptocurrencies: why some are more volatile than others - Naresh Aggarwal associate director, policy & technical, ACT] | ||
*[https://www.bankofengland.co.uk/research/digital-currencies Central bank digital currencies - Bank of England] | |||
[[Category:Cash_management]] | [[Category:Cash_management]] | ||
Latest revision as of 22:12, 4 March 2023
A cryptocurrency is a virtual digital currency based on cryptography and peer-to-peer networking, for example Bitcoin.
Sometimes known as 'crypto-assets', also written cryptoassets.
Regulators and some commentators prefer these terms, as a reminder that cryptoassets are not currencies in the traditional sense.
- Cryptocurrency, central bank digital currency (CBDC) & regulation
- "A CBDC would be fundamentally different to cryptocurrencies or cryptoassets.
- Cryptoassets combine new payments systems with new currencies that are not issued by a central bank...
- Our Financial Policy Committee has assessed cryptoassets and concluded that they do not currently pose a risk to monetary or financial stability in the UK. However, cryptoassets do pose risks to investors and anyone buying cryptoassets should be prepared to lose all their money...
- HMT’s proposed approach [is] for an overarching framework to bring crypto-assets into the scope of activities that are regulated – the ‘regulatory perimeter’."
- Bank of England - CBDC versus cryptocurrency.
- Case for cryptocurrency is weaker than for blockchain
- "The use case for cryptocurrencies – from providing an alternative to expensive and entrenched traditional finance to enabling anonymity and an escape from government-held monopolies – seems feebler after the many scandals and frauds that have plagued the sector.
- The idea that cryptocurrencies are an inflation hedge, which is supposed to work thanks to crypto’s limited supply, took an especially hard beating.
- It turns out that not only do cryptos not hedge against inflation, but they act as a typical risk asset, so are extremely cyclical – the demise of the sector has been very similar to the wider tech sector pullback.
- ... the economics use case for cryptocurrencies is not to be confused with the use of blockchain technology.
- Solving an important economic problem – that of trust between contractual counterparties – blockchain is probably here to stay, especially after improvements in its appalling energy inefficiencies.
- It’s true that commercial blockchain technology applications have also experienced several significant drawbacks lately.
- But this seems more a part of a wider tech downcycle, which blockchain is likely to survive – especially as computing power gets cheaper still."
- Tamara Basic Vasiljev, Senior Economist, Oxford Economics - The Treasurer, March 2023, p20.
See also
- Altcoin
- Bank of England
- Bitcoin
- Blockchain
- Blockchain Governance Initiative Network (BGIN)
- Central bank digital currency (CBDC))
- Centralised finance (CeFi)
- Cryptoassets
- Cryptocurrency mining
- Cryptography
- Currency
- Decentralised finance (DeFi)
- Digital currency
- Ether
- Fiat currency
- Financial Policy Committee
- Gold standard
- HM Treasury (HMT)
- Libra
- Money
- Non-fungible token
- Peer-to-peer
- Regulation
- Ripple
- Virtual currency
