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6. What are virtual currencies?

A virtual currency is a digital representation of a value that is neither issued or guaranteed by a central bank or public authority, nor necessarily linked to a legally issued currency and does not have the legal status of a currency or money, but which is accepted by natural or legal persons as a means of exchange and can be transferred, stored or traded electronically.

Only those virtual assets that function as a means of exchange or payment are therefore covered. Assets with only an investment function (such as ‘security tokens’, which, for instance, confer rights to an interest in a company) or a utility function (such as ‘utility tokens’, which confer rights to future products or services) are excluded. The Regulation does not apply to digital assets that are unique and not exchangeable amongst themselves.