Digital currencies .. Great benefits and wholesale risks

A decade ago, the world witnessed a rapid movement towards digital transformation in all fields. The world of finance and business was characterized by a large share of the digital revolution that started to lead the compass towards the virtual world. Markets, banks, stock exchanges, companies, libraries and virtual repositories emerged. So why not expect the virtual currency to appear and deal with conventional currencies?
A virtual currency - also known as digital currency or electronic money - is the balance of money electronically recorded on a stored value card or other electronic intermediary or stored on electronic networks, allowing the transfer of value over the Internet, a virtual currency encrypted in all aspects of dealing with it, not An official currency has the power of legalization. Digital currency can be obtained, stored, accessed, and electronically handled. It can also be used for a variety of purposes, as long as the deal is approved by the parties.
While some digital currencies are convertible into official currencies, there are types of digital currencies that are not convertible and are highly risky. In all cases, digital currencies are issued without the participation or support of the state.
Just a few years ago, digital currencies were not known outside the online videoconferencing community, but today the total market value of the top 100 convertible virtual currencies exceeds 9 billion US dollars. Governments around the world are working to determine whether digital currencies should be regulated and regulated.
Digital currency offers customers a new option for payment and stimulates large investments in payment technology that has the potential to create more new options for customers and investors in the future.
That dealing in digital currencies involves high risks will be summarized as follows:

1. Loss or theft: The digital currency can be lost by security breach, user error, or technological failure in the digital currency portfolio. When one of these occurs, the digital currency can not be restored.
2. Fraud or unauthorized use: In general, a person can fraudulently obtain the proprietary data of the owner of the digital wallet - such as a password - to be spent from it, so transactions can not be reversed in most currencies, even if the result of fraud or use unauthorized.
   3 - Mistake in processing transactions: In the case of payments made by mistake, such as payment to another beneficiary, the transfer of an incorrect amount or failure to complete the transaction in time due to the error of the currency portfolio or other technical reasons, in most digital currency systems do not The wrong transaction can be reversed, and the client has no right of recourse to the other parties.
   4 - Errors associated with platforms: No mechanism is available to compensate the owners of portfolios in case of failure of the electronic platform that performs the operations of the portfolio or in the event of malfunctions that can not access the portfolio.
3. The use of money laundering, terrorist financing and Internet-related criminal activities: Digital currencies are encrypted currencies. Transactions and user identification are recorded only through virtual digital "addresses" issued by digital currency dealing systems, which can not reflect the true identity of customers.
   As such, digital currency transactions are more anonymous than other forms of online payment, so digital currencies can be misused as a means of money laundering, terrorist financing, tax evasion and other forms of illegal activity because of the difficulty of tracking digital currency transactions, making dealing more manageable For use by money launderers or terror financiers
   Even in the light of the magnitude of the big risks associated with digital currencies, they are not all evil to be avoided. IMF Managing Director Christine Lagarde commented on digital currencies and its core technologies as "it can provide faster and cheaper financial services and can become a powerful tool to deepen inclusiveness In the developing world.

But the challenge will be how to get all these benefits and at the same time prevent illegal uses such as money laundering, terrorism financing and fraud. "