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Convertible virtual currency

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Definition Edit

Convertible virtual currency (also called open virtual currency)

[is a] type of virtual currency [that] either has an equivalent value in real currency, or acts as a substitute for real currency.[1]
has an equivalent value in real currency and can be exchanged back-and-forth for real currency.[2]

Overview Edit

"Examples include: Bitcoin; e-Gold (defunct); Liberty Reserve (defunct); Second Life Linden Dollars; and WebMoney."[3]

"Some convertible virtual currencies can be exchanged directly through the issuing administrator (directly exchanged); others must be exchanged through a virtual currency exchanger (third-party exchanged)."[4]

References Edit

  1. Guidance: Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies, at 1.
  2. Virtual Currencies: Key Definitions and Potential AML/CFT Risks, at 4.
  3. Id.
  4. Id. at 13 n.9.

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