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Commonwealth Virtual Currencies Working Group Meeting

In efforts to combat cybercrime and explore new technology to boost social and economic growth, the Commonwealth has formed a specialist group to investigate the opportunities and challenges presented by virtual currencies such as Bitcoin.

The Commonwealth Virtual Currencies Working Group will meet for the first time from 24 -26 August in London to develop more robust measures to manage these currencies. The group is made up of the following members: The Commonwealth Secretariat, Australia, Barbados, Kenya, Nigeria, Singapore, Tonga and the UK, together with the IMF, World Bank, Interpol and the United Nations Office on Drugs and Crime (UNODC).

Virtual currencies are digital representations of value that can be traded and exchanged anonymously between online communities. While providing certain benefits such as reduced transactions costs for remittances and micro-payments, they also carry a degree of risk. This is because of their susceptibility to fraud and hacking, and the anonymous nature of transactions leaves them open to criminal exploitation.

The following points will be explored:

  • the likely risks associated with the use of virtual currencies, such as internet enabled crime, money laundering and financing of terrorism;
  • the existing legal frameworks in the Commonwealth and how they apply to virtual currencies;
  • the regulatory responses required in sectors including banking, financial services and communications technology to secure virtual currency transactions;
  • the potential benefits virtual currencies would provide to developing countries, such as a reduction in transaction costs for remittances, innovations such as micro-payments or benefits for small and medium-sized enterprises.

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