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Why confusion will exist for a long time

Digital money is actively developing and is only on the verge of mass use. The general public has been familiar with the concept of cryptocurrency for about 10 years, and government agencies began to regulate this area only three years ago, and this was due to the rise of bitcoin. The ambiguity in the perception of digital money is clearly visible on the example of Libra, since financial regulators of different countries still have not formed a unified opinion about what Libra is all the same.

The definition of cryptocurrency still varies between jurisdictions or even within them. How many regulators, so many opinions. For example, even in one US country, government agencies give cryptocurrencies different definitions depending on their competence:

  • The Securities and Exchange Commission says cryptocurrencies are securities.
  • The U.S. Internal Revenue Service defines cryptocurrencies and virtual currencies as property. 
  • The Financial Crimes Network calls cryptocurrencies money. 

In Russia, officials even called Bitcoin a “currency surrogate,” but we have come up with a single tree of terms that clearly shows differences and similarities with examples.

Why are Libra and JPM Coin cryptocurrencies?

JPMorgan Chase introduced its JPM Coin as a digital coin, and Facebook executives called Libra cryptocurrency. Obviously, JPM Coin and Libra differ in functionality, but in both cases, crypto enthusiasts spoke out about the fact that Facebook and JPM Coin are virtual money and not cryptocurrencies due to the lack of decentralization. But they turned out to be wrong, because the concept of “cryptocurrency” may well include the absence of decentralization since not all cryptocurrencies work on a public blockchain.

Cryptocurrency is a digital currency that is based on cryptography to ensure data authenticity and transaction security.

Bottom line: JPM Coin and Libra can be called cryptocurrencies since the protection of the immutability of data in them is based on cryptography.