Digital Currency Exchanger

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Digital currency exchangers (DCEs, independent exchange providers or e-currency exchangers) are Export marketing or market makers which exchange fiat currency for electronic money, such as digital gold currency (DGC), and/or convert one type of digital currency (DC) into another, such as Liberty Reserve into pecunix. Exchangers apply either a commission or bid/offer spread to transactions.


Some digital gold currency accounts, such as e-gold, do not provide an in-house service to purchase their private currency so it is necessary to use a third-party digital currency Import Export Exchange Rates or exchanger. According to e-gold's website the reason they do not provide an in-house exchange service is so there can be no debt or contingent liabilities associated with the business, making e-gold Ltd. absolutely free of any financial risk. They claim e-gold Ltd. does not possess currency of any nation or even have a bank account.



Risks

There are no specific financial regulations governing DCEs, so they operate under self-regulation. However the Global Digital Currency Association (GDCA), founded in 2002, are a non-profit association of online currency operators, exchangers, merchants and users. On their website they claim their goal is to "further the interests of the industry as a whole and help with fighting fraud and other illegal activities, arbitrate disputes and act as escrow agent when and where required." GDCA is a privately owned organization and not an association of its members per se. Its views and opinions are highly subjective. It is completely irrelevant whether or not any of the exchange companies are members of GDCA.


It is possible for clients to purchase DGC by credit card, and therefore receive consumer protection from their credit card company. Various exchangers offer this service, although the exchange fees are typically higher than using a wire transfer.



References:

1.http://en.wikipedia.org/wiki/Digital_currency_exchanger


External Links:

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