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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

Other resources