or advisories, values of virtual currencies slumped and have become very volatile with daily swings of 5-20 per cent. Bitcoin trades at USD 740, down 25 per cent from its peak.
"The message of central banks is one of caution, reminding consumers that Bitcoin is not government sanctioned or insured and that any involvement would incur personal financial risk. Infrastructure needs to be built and the
foundation is hard at work educating regulators, lawmakers,
and the public...," Lee Englund said.
A virtual currency is a form of unregulated digital money, not issued or guaranteed by a central bank, which can act as a means of payment. It is now increasingly possible to use virtual currencies as a means to pay for goods and services with retailers, restaurants and entertainment venues.
Virtual currencies can be bought at an exchange platform using conventional currency. They are then transferred to a personalised account known as a 'digital wallet'. Using this wallet, consumers can send virtual currencies online to anyone else willing to accept them, or convert them back into a conventional fiat currency.