More and more countries are choosing to legalize and adopt different cryptocurrencies as legal tender. But one of the great problems for the populations that opted for this decision is the lack of knowledge that exists regarding legal, operational and regulatory issues. Can cryptocurrencies be taken as money or not?
To explain that point, we must analyze the functions that money fulfills and compare them with these new currencies.
Deposit of Value: money is a means of store of value, and will maintain its value in a stable way over time. In this sense, crypto assets could be taken in the first instance as a store of value, since they are assets that maintain their value over time.
Unit of Account: money is used in order to determine units of value, cost or prices that goods and services possess. Crypto assets do not determine the value or cost of other services or assets yet, but over time nothing says that consumers do not begin to relate costs in crypto and not in money.
Medium of exchange: money can be used as a means of canceling obligations or exchange for all types of transactions, being used as a means to acquire, buy or cancel services, taxes, goods.
In this case, it could be said that depending on the type of asset in the crypto market. In any case, and in principle, any type of crypto can be used as a means of exchange when it is used to buy or pay for goods and services.
Backup: the money is backed by the central banks of the government and its issuance is centralized. On the other hand, in relation to support, cryptocurrencies do not have the support of any Central Bank since they are private and are not under the mandate of any government. In addition, the issuance of cryptocurrencies is tied to algorithms and not to the public policies of the different governments and their issuance is decentralized and not centralized like money.