In the past five years, virtual currencies, or 'cryptocurrencies' have evolved tremendously and are quickly establishing themselves as a payment system. Today, virtual currencies are a multibillion-dollar venture with dual potential as both an investment and an electronic medium of exchange. Increasingly, mainstream retailers are announcing plans to accept Bitcoins, Bitcoin ATMs are growing in prominence, the first Bitcoin debit cards have been delivered and the first Bitcoin derivative transactions have been executed on a US-regulated exchange. Yet, there remain numerous risks and challenges associated with virtual currencies. In addition to experiencing significant volatility in exchange rates and susceptibility to attacks from and illicit use by cybercriminals, the virtual currency marketplace remains largely unregulated. Governments around the globe are taking widely divergent actions - or taking no action at all - to define and regulate virtual currencies. This article will provide an overview of the virtual currency landscape, including legislative, regulatory and law enforcement developments.
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