Commonwealth focuses on virtual currency solutions

Virtual currencies, which have long been dismissed as a medium of exchange for criminal markets, were a highlight at a recent Commonwealth of Nations meeting, where senior finance officials and central bank governors from Australia, India, Singapore, the United Kingdom and other countries discussed how virtual currencies could be used to solve current global financial problems.

Advantages of virtual currency

One of the main applications of virtual currencies is in the remittance sector, an industry that has been identified as growing in some Commonwealth member countries. Various remittance and mobile payment services have been launched in South Africa, catering to the needs of the country’s unbanked population.

In particular, Dr. Garrick, a professor at the London School of Economics (LSE), introduced the current state of virtual currencies. Leaders discussed the move by some banks to close remittance businesses to prevent them from being involved in money laundering, but this also limits the options for those who simply want to transfer funds overseas.

Just last month, several major banks in Australia refused to provide services to companies that use virtual currencies for transactions because they could be involved in money laundering and terrorist financing. Sonia Plaza, a senior economist at the World Bank , even mentioned that this may be a move by established banks to compete with each other, because virtual currency companies may grab some of their market share.

The leaders of the Commonwealth’s central banks appear to agree that using virtual currencies to transfer money does more harm than good because it hurts those who need it most.