Riyadh-Mohammad al-Amin Jamous

The world has become in a feverish race with new technologies, as it began to move strongly towards the use of cryptocurrencies and digital currencies in daily transactions after it became a strong market that competes with its paper counterpart, and questions about the identity of the difference between cryptocurrencies and digital currencies. Are they the same or are there differences?

“Riyadh Chamber” organized a lecture on the danger of dealing with these currencies aimed at defining the types of cryptocurrencies, their origins, their reality, and the position of regulators and legislators on them, presented by Dr. Meshal bin Saleh Al-Samhan, professor of commercial law at Majmaa University and researcher in financial technology.

Digital currencies and Bitcoin

Samhan explained, during the lecture, that cryptocurrencies include a number of types, that Bitcoin is a separate type, and that the chosen definition of Bitcoin is: A secure, intangible, decentralized, cryptographic asset that has value and is barterable. He then said that other cryptocurrencies differ from Bitcoin in that some are backed by a project, some are affiliated with a company or project, some have created a payment service for a specific company, some are under construction, covered in gold, or have a terabyte (interest-bearing loan) purpose.

Samhan explained that cryptocurrencies include a number of types, and that Bitcoin is a separate type in and of itself, and that the chosen definition of Bitcoin is: "a loan with interest.

Difference between digital and virtual currencies

Samhan added that there are several differences between digital, virtual and cryptocurrencies, explaining that a digital currency is »a currency with the electronic liability of a central bank that can be used to settle payments or as a store of value" and a virtual currency is "a virtual currency in a specific virtual world, within a computerized electronic system, often in games, and has value in its specific world."

Virtual currency is "a virtual currency in a specific virtual world, within a computerized electronic system, often in games, and has value in its specific world."

Similarities between the two currencies

There are important points that unite the two currencies, the most important of which is the use of blockchain technology, which requires access to these currencies only through computers and mobile phones, as they exist only in electronic form.

Cryptocurrencies

Digital currencies are issued by central banks and are regulated by countries according to their monetary policy and consistency with fiscal policies, and are called Central Bank Digital Currency (CBDC) and have an electronic ledger and carry a unique serial number, to prevent counterfeiting and allow traceability.

Digital currencies have an electronic ledger and carry a unique serial number, to prevent counterfeiting and allow for traceability.

<p class="wp

Cryptocurrencies

Cryptocurrencies are a facet of digital currencies that appeared in the financial markets about 10 years ago, and have emerged in the last three years strongly, the most prominent examples of which are Bitcoin, Ethereum, Binance Coin, Cardano, and Dogecoin.

Cryptocurrencies are a facet of digital currencies.

Warning against suspicious trading

In terms of the Sharia ruling, Al-Samhan warned against dealing with these currencies because of the harm they entail, such as money laundering, ignorance, facilitation, deception, and some internationally prohibited transactions such as money laundering and supporting terrorism.

====

Digital currencies recognized for public and private debt settlement

The trading of cryptocurrencies shows that they are highly volatile between rising and falling in a large range within a short period of time, due to their dependence on the price determined by supply and demand only and not supported by official government agencies, which reflects a high level of risk, according to economist Natalia Espanyol, who pointed out that digital currencies will not be subject to the same thing because their price is linked to the economic and political performance of countries, and subject to what is known as legal tender, meaning it is a recognized means to settle public or private debt or fulfill a financial obligation, unlike cryptocurrencies that are prohibited in many countries of the world.

.