Licensed Cryptocurrency
Cryptocurrencies are digital assets, typically decentralized and based on blockchain technology that can be used as a medium of exchange. While the majority of cryptocurrencies are not backed or regulated by any government entity, there is a growing number of licensed cryptocurrencies available to users around the world.
A licensed cryptocurrency is a virtual asset that has been approved and/or regulated by one or more national regulatory authorities in order to make it easier for investors and consumers to use them with confidence. In general, these governments have required companies issuing such currencies to demonstrate their financial solvency in order to protect consumers from fraud or manipulation. Additionally, many countries require that providers of licensed crypto-assets comply with existing anti-money laundering (AML) regulations.
The main benefits of using licensed cryptocurrency include:
– Increased Security: Licensed cryptocurrencies offer additional security because they must meet certain criteria before being accepted into circulation; this helps protect investors against fraudulent activities and market manipulation schemes.
– Lower Risk: A license from an official governing body gives investors increased assurance due to the oversight provided by regulatory bodies which monitor operations closely for compliance with laws like AML requirements. This reduced risk can lead to higher returns over time when compared with unregulated alternatives since the risks associated with investing in unlicensed cryptos may be much greater than those associated with ones that have obtained a license from regulators.
– Transparency: The licensing process also ensures transparency regarding how funds are managed within these networks as well as providing insight into who owns what coins at any given time – something not possible without regulation or oversight from governmental entities.
Overall, having access to licensed crypto-assets provides potential investors and users more security and peace of mind when utilizing them for transactions versus non-regulated options – making them attractive investments for both novice traders looking for safe entry points into the space as well as experienced professionals seeking out alternative avenues for diversifying portfolios beyond traditional markets