what is a virtual currency 
a virtual currency is a digital representation of value it is stored and transacted through designated mobile or computer applications transactions involving virtual currencies occur through secure dedicated networks or the internet they are generally issued by private parties or groups of developers and are mostly unregulated understanding virtual currenciesvirtual currencies are a form of digital currency they are issued by private parties such as a group of developers or organizations and do not have a physical form like paper money they include cryptocurrencies and other tokens that hold value they differ from officially issued digital currencies called central bank digital currency cbdc virtual currencies have been around for many years but it s only since bitcoin was introduced that it became important to define the different types of digital currencies these definitions may change over time as regulators academics and interested parties learn more and become more familiar with them regulatory environmentas of june 2024 regulations covering virtual currencies tokens and assets are still emerging around the world for example in 2023 the european union published a broad definition in its markets in crypto assets mica regulation crypto assets are digital representations of value or of rights that have the potential to bring significant benefits to market participants including retail holders of crypto assets according to this rule a virtual currency may not fall under mica jurisdiction in the eu but it might if it meets this very vague definition 1the internal revenue service irs in the united states describes virtual currencies as digital representations of value other than a representation of the u s dollar or a foreign currency real currency that function as a unit of account a store of value and a medium of exchange 2 it also taxes trades involving certain virtual currency types such as cryptocurrencies the market watchdog the securities and exchange commission sec has brought u s based cryptocurrency exchanges under its supervision and continues to scrutinize all crypto related products services and providers 