Editing Digital currency (section)

===Digital versus virtual currency===
{{main|Virtual currency}}
A virtual currency has been defined in 2012 by the [[European Central Bank]] as "a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific [[virtual community]]".<ref name=":2">{{Cite web|url=https://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf|title=Virtual Currency Schemes|date=October 2012|website=ecb.europa.eu|access-date=1 February 2018}}</ref> The [[US Department of Treasury]] in 2013 defined it more tersely as "a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency".<ref name="auditreport">{{Cite web|url=https://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG-16-006.pdf|title=Audit Report|date=10 November 2015|website=Treasury.gov|access-date=1 February 2018}}</ref> The US Department of Treasury also stated that, "Virtual currency does not have legal-tender status in any jurisdiction."<ref name="auditreport" />

According to the [[European Central Bank]]'s 2015 "Virtual currency schemes – a further analysis" report, virtual currency is a digital representation of value, not issued by a central bank, credit institution or e-money institution, which, in some circumstances, can be used as an alternative to money.<ref>{{Cite web|url=https://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemesen.pdf|title=Virtual currency schemes - a further analysis|date=February 2015|website=ecb.europa.eu|access-date=1 February 2018}}</ref> In the previous report of October 2012, the virtual currency was defined as a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community.<ref name=":2" />

According to the [[Bank for International Settlements]]' November 2015 "Digital currencies" report, it is an asset represented in digital form and having some monetary characteristics.<ref>{{Cite web|url=https://www.bis.org/cpmi/publ/d137.pdf|title=Digital Currencies|date=November 2015|website=bis.org|access-date=1 February 2018}}</ref> Digital currency can be denominated to a sovereign currency and issued by the issuer responsible to redeem digital money for cash. In that case, digital currency represents electronic money (e-money). Digital currency denominated in its own units of value or with decentralized or automatic issuance will be considered as a virtual currency. As such, bitcoin is a digital currency but also a type of virtual currency. bitcoin and its alternatives are based on cryptographic algorithms, so these kinds of virtual currencies are also called cryptocurrencies.