The first Czech virtual currency starts today!

Another virtual currency was “borne” today (17 July 2014) at noon. A Czech Crown Coin (the abbreviation used by the authors is “CZC”) as it is called, is established. The announced amount of coins is 100 million and the currency will be, similarly to other virtual currencies, mined. The mining website was opened at the same moment. Half of the total volume of CZCs has been already pre-mined, the other half should be mined within the next 4 to 10 years. The distribution of a limited number of free-of-charge coins to registered Czech citizens is announced to start in the first half of September 2014.

As other virtual currencies, CZC is not backed up by any bank or other financial institution and due to the strictly defined volume of coins in circulation and lack of state control it cannot suffer from inflation. The authors of the project have highlighted positive features of the CZC, being a de-centralised peer-to-peer currency, which are direct payments from the electronic valet of the CZC owner to all over the World, speed of the transaction, minimal transaction costs, anonymity of the payer. Although the virtual currency has another positive aspect, which is its ability to be kept or traded as an investment, one should not forget about the cons, such as no (state) guarantee, no refund if the password to electronic wallet is lost or stolen, hacker’s attacks, publicity of the (although anonymous) transactions, unclear tax treatment for those participating in trading using the virtual currency either as means of payment or as a traded asset.

From the official website and from the press announcement it is not known who stands behind the project, but the authors claim their aim is to support Czech e-business. Interestingly, apart from the Czech, English and Russian versions of the website, the fourth language used is Chinese.

If you need further information on CZC, please contact our subject matter specialist, Ms Petra Safkova at petra.safkova@ch.pwc.com or +41 58 792 9543.

 

About Andras Salanki

Manager PwC Switzerland email: andras.salanki@ch.pwc.com Office: +41587924536

Andras Salanki is an international VAT advisor with 7 years of relevant professional experience. He spent one year on secondment in California, US, where he advised US multinationals on global VAT projects and also gained experience with IT and Internet companies based in the Silicon Valley.