Mobile Money Agents in Tanzania: How Busy, How Exclusive? Community-Managed Loan Funds: Which Ones Work? Bitcoin development guide report shows that Bitcoin as a virtual currency is markedly different from e-money and cautions regulators and policy makers not to confuse the two. There are few similarities between Bitcoin and e-money other than both being in digital format, according to the report.
While e-money is a mechanism for interacting with government-issued and regulated currencies such as dollars and euros, Bitcoin is a virtual currency that has no fiat currency counterpart. Bitcoin is based on a decentralized peer-to-peer network that can be transferred somewhat anonymously and can be highly volatile in terms of value. The full report is available at CGAP. On the other hand, e-money is digitally issued against equal value of fiat currency, and it can be centrally regulated, usually by a central bank. The report also points out that, unlike Bitcoin, there is growing evidence that e-money schemes have helped bring people into the formal financial system, especially in developing countries through mobile phone technology. Sarah Rotman, Financial Sector Specialist at CGAP and author of the report. While we shouldn’t completely rule out Bitcoin’s future potential in this market, it’s very difficult to predict where Bitcoin will be in five years and if it can have any impact for the poor.
With the current widespread attention surrounding Bitcoin, the report warns that regulatory concerns about the virtual currency could spill over to e-money and cause previously favorable regulatory progress to be retracted. It concludes that for e-money to continue to open access to the formal financial system for the world’s unbanked, continuing with proportional regulation is essential. Established in 1995, CGAP is a global think-tank which seeks to advance financial inclusion. Housed at the World Bank, CGAP is a collaboration of more than 30 member agencies that are united by the mission of improving the lives of poor people through better access to appropriate financial services.
CGAP combines a pragmatic approach to market development with an evidence-based advocacy platform to advance poor people’s access to financial services. Get your basic questions about financial inclusion and microfinance answered. This report surveys forty foreign jurisdictions and the European Union, reporting on any regulations or statements from central banks or government offices on the handling of bitcoins as well as any significant use of bitcoins in business transactions. Of those countries surveyed, only a very few, notably China and Brazil, have specific regulations applicable to bitcoin use.
There is widespread concern about the Bitcoin system’s possible impact on national currencies, its potential for criminal misuse, and the implications of its use for taxation. Overall, the findings of this report reveal that the debate over how to deal with this new virtual currency is still in its infancy. Updates and additional countries have been added below. There are no official statements on the Alderney government’s website regarding its position towards the bitcoin, and it appears to be unregulated on the island.