“Virtual currencies offer countries a cost-effective, fast and accessible alternative to settling financial payments, but unclear laws and regulations are preventing their responsible development and encouraging their exploitation by criminals, says a new Commonwealth report. Virtual currencies, which allow funds to be transferred, traded or stored electronically, have seen exponential growth in recent years, however, unlike other currencies, they are not issued by a central financial authority. Once seen as the domain of only the hard-core computer community, currencies such as Bitcoin, Litecoin and Dogecoin are cropping up in everyday use in most Commonwealth countries according to research carried out by the Commonwealth Working Group on Virtual Currencies. Despite being unregulated or under-regulated, virtual currencies are legal in all Commonwealth countries except Bangladesh. The report explores the benefits, outlines the risks and makes recommendations to help countries respond to and regulate the technology. It represents the first step in improving legislative and regulatory frameworks in the Commonwealth to protect the legitimate use of virtual currencies and prevent cybercrime. Katalaina Sapolu, Director of Rule of Law at the Commonwealth Secretariat, commented: “Recognising the rapid expansion of virtual currencies and the need to combat cybercrime, the Commonwealth formed a specialist working group to help its members upgrade laws to harness the benefits and counter risks. This report constitutes the group’s initial findings and aims to provide an informative and useful resource to help lawmakers, police, financial regulators and tax authorities.” The report says virtual currencies – at the heart of which is a ‘blockchain’ acting as a digital ledger of transactions – offer individuals and organisations an alternative to the banking system. They can be a cheaper and faster way to trade goods, make payments and send and receive money, for example offering diaspora communities a means of sending funds overseas without paying high transfer fees. In some countries where virtual currencies have been more widely adopted, such as Singapore, it is not unusual to see a Bitcoin cash machine or ATM.”