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There are three terms commonly used to describe currencies like Bitcoin: digital currencies; virtual currencies; or cryptocurrencies. Since laws mentioned in this article use the term “virtual currency”, this article will use that term when referring to currencies such as Bitcoin. Also, the terms “coins” or “tokens” are both used to describe the units of virtual currency. “The difference between a coin and a token is that a coin is a form of cryptocurrency that operates independently of other platforms... Tokens, on the other hand, are built on top of another platform in order to function. For the purposes of regulation, this is a distinction likely to be more form than substance.”1

Virtual currencies are not fiat currency. Fiat currency is “currency that is issued or backed by a governmental authority