A Virtual Asset Service Provider (VASP) is a business that provides services for the custody and exchange of virtual assets. Bitcoin is a decentralized digital currency, with no central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
While Bitcoin is often portrayed as an anonymous currency, the reality is that it’s not completely private. Transactions are recorded on a public ledger, which means that anyone can see the addresses involved in a transaction and the amount of bitcoin being sent.
However, the identities of the parties involved are not revealed.
So, is Bitcoin a VASP? While it doesn’t fit perfectly into the definition, it does provide some services that would traditionally be provided by a VASP. It’s decentralized nature makes it unique among other digital currencies, and its pseudonymous nature offers some privacy protections.