A currency that is accessible digitally. In simple words, Digital Currency is an electronic form of currency. Nowadays, everything is evolving into digitization.
Digital currencies have all inborn properties like physical money, and they permit immediate exchanges that can be consistently executed for making instalments across the outskirts when associated with upheld gadgets and networks. Cryptocurrencies, virtual currencies, central bank digital currencies, and e-Cash are some of the examples of digital currency. However, there is one important thing which you should keep in mind that all cryptocurrencies are digital currencies, but not all digital currencies are crypto.
What is digital currency?
Digital Currency is money that is in the digital or electronic form and it is intangible. The digital currency has various names like digital money, electronic money, electronic currency, and cybercash. It tends to be moved between substances or clients with the assistance of technology like PCs, cell phones, and the web. In spite of the fact that it is like physical monetary standards, digital currency permits a borderless exchange of ownership as well as instantaneous marketing. Digital currencies can be utilized to buy commodities and services. However, it can likewise be limited to certain online networks, for example, a gaming or interpersonal organization.
Certain advantages of digital currency:
- Payments in digital currencies are made straightforwardly between the executing parties without the need for any go-betweens, so the exchanges are generally momentary and require a lower cost typically feeding into personalized, private e-wallets on either end of the transaction.
- These charges are better contrasted with customary payment techniques that include banks.
- Digital currency-based electronic exchanges likewise get the fundamental record-keeping and straightforwardness in dealings.
- There are several more advantages like fraud protection, simpler International payments, and so on.
With the Philippines being the third largest recipient of remittances globally, many firms are vying for the coveted “virtual currency exchange license” in the Philippines to operate a business that can deal with crypto to fiat and fiat to crypto transactions. Through our diverse partner network our clients gain immediate direct access to our VCE working relationships and vast cryptocurrency transaction processing capabilities.
Blockchain products require identity verification in order to use crypto-to-crypto exchange and related exchanges services. Oftentimes it is only once you are verified will the crypto exchange or the crypto wallet allow you to withdraw.
The more users continue to sign up and more capital enters the crypto space, regulators will further designate specific Know your Customer (KYC) rules that exchanges need to follow. The G20 issued a statement:
“Crypto-assets lack the key attributes of sovereign currencies. At some point they could have financial stability implications. We commit to implement the FATF [Financial Action Task Force] standards as they apply to crypto-assets, look forward to the FATF review of those standards, and call on the FATF to advance global implementation. We call on international standard-setting bodies (SSBs) to continue their monitoring of crypto-assets and their risks, according to their mandates, and assess multilateral responses as needed.”
December 1, 2020 — The Bangko Sentral ng Pilipinas (BSP) has approved to recognize “digital bank” as a new bank category separate from existing bank categories. This is the seventh bank category in the Philippines.
In a statement, BSP Governor Benjamin Diokno sees digital banks’ important role in promoting market efficiencies and expanding access of Filipinos to financial services. The BSP now targets 50% of all retail transactions to shift to digital by 2023. Additionally, it wants 70% of all adult Filipinos to have transaction accounts by 2023. The move, the governor said, would leapfrog the agency’s financial inclusiveness agenda.
Because digital banks are subject to the same financial risks such as cybersecurity and money laundering risks, they will be subject to the same requirements as other bank types but these requirements will be recalibrated to be in line with these new bank type’s business model and risk profile. Likewise, they must have “sound digital governance, robust, secure and resilient technology infrastructure, and effective data management strategy and practices,” the statement said. Digital banks must have a principal place of business in the Philippines to house management, operations, and support for customer concerns as well as to have a point of contact with the regulators.
The BSP said they may limit the number of digital banks that can be established depending on the overall banking situation in the country. “Essentially, the BSP is looking to attract players with strong value proposition, sufficient financial strength, technical expertise of management and effective risk management,” Governor Diokno added.