The use of the word "currency" often entails imprecision and leads to confusion. Throughout my writing I will use the word as a defined term denoted by capitalizing it and hyperlinking to this definition page:
As I will use the term,
A Currency means a brand of money.
For example, USD, EUR and JPY are all major Currencies. My hope and intent is that AUG® also becomes useful as an alternative global Currency.
Of course the word has other conventional meanings, which is why I will always restrict my usage of it to the definition above. For instance, in some contexts it means paper cash; "The suspect was apprehended in a warehouse containing bales of counterfeit currency". It may also refer to broad and common usage as in "While his views were regarded as shocking to his contemporaries, in recent decades they have gained currency as conventional wisdom".
Given the multiple possible definitions, one could correctly say, "e-gold was the first privately issued currency to gain significant currency without ever circulating in the form of currency."
An example which I feel represents the pitfalls of using the word "currency" imprecisely comes from FinCEN's March 18, 2013 Guidance FIN-2013-G001 "Application of FinCEN's Regulations to Persons Administering, Exchanging , or Using Virtual Currencies":
Currency vs. Virtual Currency
FinCEN's regulations define currency (also referred to as "real" currency) as "the coin and paper money of the United States or of any other country that [i] is designated as legal tender and that [ii] circulates and [iii] is customarily used and accepted as a medium of exchange in the country of issuance." In contrast to real currency, "virtual" currency is a medium of exchange that operates like a currency [my italics] in some environments, but does not have all the attributes of real currency. In particular, virtual currency does not have legal tender status in any jurisdiction. This guidance addresses "convertible" virtual currency. This type of virtual currency either has an equivalent value in real currency, or acts as a substitute for real currency.
Let's try to parse this. It starts out by anchoring their attempt at definition to the only official definition of "currency" in Federal code - 31 CFR § 1010.100(m). That definition is explicitly limited to "The coin and paper money of the United States or of any other country...".
By the time they reach the second sentence however, after gratuitously coining the purported synonym "real currency", they have switched to talking about "a currency". This usage is congruent with how I will consistently use the word, i.e., brand of money, but is wholly inconsistent with the existing legal definition which deals only with coin and paper money. The sense of saying "a currency" is the same sense that would allow use of the plural. It simply doesn't work for paper money. "Did he pay you with a check? No, he paid with a currency", or, "Dude, how many currencies do I owe you for that?"
What they are obviously trying to do is to classify any brand of money that isn't issued by a government entity as "virtual currency" 1 and to somehow tie that working definition into actual laws that exist. But the existing legal definition they rely on, for "currency", as well as the only reference in US Code to "legal tender"2, both exclusively specify paper cash (and coin). So instead they have come up with a definition for virtual currency that would encompass all USD except that which exists in anonymous bearer form. Commercial bank deposits would be virtual currency under their definition (being neither currency nor legal tender) as well as the trillions of USD on deposit in Federal Reserve Banks which serve as the underlying reserves.
1 - The term "virtual currency" is ill conceived but is starting to crop up in regulations that potentially lump brands of Real Money (such as AUG) into the same wastebasket as play money (such as Bitcoin).
2 - "Legal tender" is another term of art that tends to be thrown around imprecisely. It has no definition at all that I can find in U.S.C., C.F.R. or Statutes at Large. But whatever it is taken to mean, only "United States coins and currency..." are declared to be such (31 USC 5103).
I offer a definition of Legal Tender with some introductory commentary in another post.
A notable example was the Lincoln administration statute in 1862 declaring "United States notes" to "...be lawful money and a legal tender for all debts, public and private...". Of note, that statute was referenced in 1933 when it was used as pretext/justification for the tinkering that led to the words in 31 USC 5103.
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