Czechs this week joined other central and eastern European countries in rolling out a new virtual currency called Czech Crown Coin (the CZC), a local alternative to other virtual currencies like the worldwide Bitcoin. The aim is to provide a Czech alternative for transactions and to boost support for online business.
The new currency was launched by a group involved in broadcast media including Ladislav Faith, employed as a cameraman at commercial TV broadcaster TV Nova, who stressed the project was fully supported in Czech and the currency would be reserved for Czech citizens. In practice, 50 percent of the reported total allocation of 100 million coins will be reserved for Czechs, dependent on registration. The remainder of the coins will be released later – over the next four to ten years. Mr Faith said he expected the virtual currency would eventually be traded internationally. The coins will first be made available in September.
Not everyone, however, is convinced the CZC is a great idea, questioning whether the currency will generate enough interest to truly take off. Also, the day the currency was announced, it didn’t take long hackers to try and hit the website, czechcrowncoin.com. Faith confirmed in the media that hackers from Russia as well as the Czech Republic had launched attacks but they had been successfully quashed; additionally, security was further boosted. But the website was not fully functional in the early afternoon on Thursday as had been planned, according to sources.
As a virtual currency, the CZC falls within a grey area lacking regulation and backing by institutions such as the central bank, itself not thrilled by the prospect. The Czech National Bank warns consumers of potential risks – such as price volatility – and called the name chosen for the virtual currency, the Czech Crown Coin, misleading and unfortunate, altogether too similar to the name of the official currency, the Czech crown.
Virtual currencies began a number of years ago, with Bitcoin, circulated online in 2009, as being the most successful. The currency is set up so that it cannot be affected by governments or central banks, such as the Fed in the US. The currency is mined online through a network of computers with specialized software, to release new coins at a stable but slowly dropping rate. Bitcoin has made headlines in everything from real estate sales (one person putting up his home in Canada for sale for either hard currency or Bitcoin) or in connection with the Deep Web and clandestine sites like Silk Road, used for illegal transactions like the sale of hard drugs which was targeted by the FBI. At the same time, more and more legitimate businesses are accepting virtual currency, including in the Czech Republic, which not long saw the launch of its first Bitcoin terminal.