Ever since the anonymous and pseudonymous Satoshi Nakamoto published a seminal white paper on October 31, 2008, the world has been in thrall to the potential of cryptocurrencies.
In essence, a cryptocurrency is a digital currency in which transactions are verified, and records are maintained by a decentralized system using cryptography, rather than by a centralized authority (such as a Central Bank like the Federal Reserve system in the U.S., the Bank of England, or the European Central Bank).
Almost by definition, cryptocurrencies raise potential benefits and risks. They represent a break from the traditional model of so-called “fiat currency,” which gives government bodies inherent regulatory power. Their use offers potential for criminals to escape the oversight of the government, but they also present potential benefits for individuals who wish to gain greater autonomy over their finances.
Maintaining a balance between these risks and benefits is the dilemma that faces regulators at present. The implications range from the need to prevent tax fraud, the need to control illicit transactions (involving e.g. narcotics or other items).
The articles in this edition address these (and other) issues raised by cryptocurrencies, and explore potential issues that may present themselves in the near future.
As always, many thanks to our great panel of authors.
Sincerely, CPI Team