Who Owns Digital Currencies (and why it matters)
Digital currencies come in different shapes and forms, which in turn has important implications for their respective use and application.
A lot depends on the question who ultimately controls a specific currency. Bitcoin, for instance, is decentralised and operates outside of the oversight of a single institution. It is therefore not well suited to manage inflation.
But a central bank issued digital currency* – none exists so far, but central banks around the world are considering it – would be a powerful tool to control and manage inflation.
A third type are digital currencies issued by banks, such as the Utility Settlement Coin (USC), being worked on by a number of top tier banks.
Our infographic: Centralised versus Decentralised Digital Currencies compares the implications the characteristics of different digital currency types have.
The chart is the second iteration in our new series on cryptocurrencies, which we are publishing in collaboration with law firm Baker McKenzie.
* For more on central bank issued digital currencies, check our recent article, “Life after Quantitative Easing“