A Theory of Optimum Cryptocurrency Scope

The complexity and interdependence of the economies of various geographical and political entities have one generic binder-money. The economic history of the last century, replicated in the first decade of our century, can be " written " with money. Indeed, money, a multiple discovery of the civilization in its historical way, was and still is the guardian of hope for prosperity. The disputes about money clearly indicate the need, opportunity and the possibility of monetary competition, which would provide, from the point of view of entrepreneurs, the most suitable production of money based on expectations of their economic preferences. Increasingly more, theorists, practitioners and analysts bring to the fore the issue of simultaneously using the official currency and the digital one. Thus, the issue of the public debate regarding the private money is still of interest. Based on these considerations, this paper aims to highlight how the digital currency Bitcoin can meet the challenges of the economic environment, taking into account both the opportunities and the threats to which it is subject, and the records emphasized by the history of economic thought and adapted to the current reality.

JOURNAL OF EUROPEAN ECONOMY, 2018

The cryptocurrency is a phenomenon of a modern payment system, however it is still unclear whether it is a new kind of currency at all. Most often, there are claims that this is just a financial pyramid. However, such statements do not explain the nature of cryptocurrency. In fact, from technical point of view, the cryptocurrency is simply a data chain, in which the first link contains information about its origin («mining»), and all subsequent ones - on the transition from one owner to another. This means that in the economic sense the cryptocurrency is the «bill of exchange», which is accompanied by a number of «transfer inscriptions» - «endorsements.» Nevertheless, banknotes are simple banker’s bills of exchange too. Therefore, cryptocurrency could become a new global currency if several specific requirements were fulfilled.

Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, 2019

The global crypto marketplace has an impact on the functioning of financial markets and has huge implications for entire economies. The article discusses the functioning of the global cryptocurrency market, and based on the analysis of the history of the most popular cryptocurrency, bitcoin, an attempt was made to determine possible development prospects. The aim of the article is to assess the development of the current crypto marketplace in the world and to present possible development prospects. The foresight method was used to implement the research objective, in particular trend analysis (quantitative data) and discrete event system (qualitative and expert data). This allows us to learn about the regularity of the cryptocurrencies in the sphere of investment management from the investors' point of view and the creation of an appropriate legal framework by the supervisory authorities and ensuring the social security of the financial system.

2020

for their comments and suggestions. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w27477.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

National, International, Transnational: Harmonischer Dreiklang im Recht - Festschrift für Herbert Kronke zum 70. Geburtstag, 2020

The notion of cryptocurrencies confronts one of the oldest economics' concepts with the newest technology developed and used in the digital economy. This contribution to the Festschrift in honnor of Herbert Kronke analyses the legal nature of cryptocurrencies from a monetary law point of view and seeks whether cryptocurrencies can be considered as transnational currencies, i.e. stateless currency without territory.

Digital Finance, 2019

International Scientific Conference „Business and Management“

In this article, we discuss the central banks’ attitude to cryptocurrencies and focus more on European Central Bank. First, based on the analysis of scientific literature, we show that cryptocurrency is money and performs all of the functions of money, such as the exchange medium, value storage, and accounts unit. We found a positive correlation between the level of economic development of a country and the level of regulation and the integration of crypto cryptocurrencies into the economic system. We discuss not only the approach of the ECB to cryptocurrencies, but also how it developed. According to the study data, the ECB only began to respond to cryptocurrency as an equivalent monetary instrument in 2021, established regulatory mechanisms, and developed the digital euro project.

Journal of Mathematical Finance, 2025

The advent of digital currencies, including cryptocurrencies and Central Bank Digital Currencies (CBDCs), presents new challenges and opportunities in the financial landscape. This study addresses the gap in economic theory regarding digital currencies by proposing a comprehensive theoretical framework that integrates their distinct characteristics with traditional monetary principles. The primary research objective is to explore the issuance, circulation, and valuation of digital currencies, as well as their impacts on monetary policy and financial stability. Using a structured theoretical methodology, the study develops a set of hybrid models that combine algorithmic issuance and discretionary policy adjustments, stability protocols for volatility control, and a regulatory framework for global compliance and financial security. The results indicate that digital currencies can complement traditional monetary functions but necessitate careful regulation to mitigate risks to monetary policy transmission and financial stability. The findings suggest policy recommendations, including global regulatory standards and enhanced stability mechanisms, to facilitate the safe integration of digital currencies into the global economy. The originality of this research lies in its hybrid theoretical framework, which balances the decentralised aspects of cryptocurrencies with the controlled issuance of CBDCs, offering a novel approach to understanding digital currency economics. This framework provides valuable insights for policymakers, financial institutions, and academics, helping them leverage digital currency benefits while addressing associated risks. The study contributes significantly to digital currency economics, presenting actionable guidance for a sustainable integration of digital finance into traditional financial systems.

Academia Letters, 2021

Emeritus professor of Political economy and Chairman of Consob, the Italian financial supervisory authority It is time that cryptocurrency must be taken into account in the way we think the economies work and in explanatory equations of the macrovariables used by econometric models. Cryptos encompass publicly created ones (CBDC-Central Bank Digital Currency) and privately mined ones (mainly, but not exclusively, stablecoin), along with financial cryptoassets (mainly tokens). Bitcoins are a special kind of cryptos, which have a systemic impact on money and financial markets through the attractiveness of their huge increase in price and the possibility to be exchanged with other cryptocurrency, as well as entering into contracts of credit, derivatives and other traditional financial operation. The mining of any kind of private cryptos creates purchasing power in the hand of miners, acting as an instrument to redistribute existing income and wealth, weakening one of the redistributions functions of democratic institutions. The presence of cryptos increases the risks of systemic market instability, as monetary creation would become endogenous affecting the parameters of monetary policy choices. if some cryptos were legitimised in the form of stablecoin, any evaluation could only be made once quantity and quality of the stabilizing reserves held against it were known; if these reserves were equal to zero, the exogeneity of monetary creation would be totally affected leaving room for instability; if they were set equal to 100%, it would be tantamount to introducing a complication that would be better avoided in the governance of money and finance. The establishment of a virtual public currency (CBDC) would stabilise the economy and bring order to the innovative technologies used (blockchain or DLT), but banks would leave the money creation circuit and would have to focus on managing savings using objective, transparent and non-manipulable systems, such as those based on artificial intelligence algorithms and decentralised accounting techniques.

Qeios, 2023

Cryptocurrency has become a disruptive force in the twenty-first century's quickly changing world, completely changing how we view and interact with conventional financial institutions. This in-depth analysis intends to give insight on the underlying technology, economic ramifications, and legal difficulties that have formed this digital phenomena in order to examine the origins, development, and effect of cryptocurrencies over the past two decades. This article begins by exploring the history of cryptocurrencies, tracing its origins back to the mysterious Satoshi Nakamoto and the invention of Bitcoin in 2009. It analyses the underlying blockchain technology that underpins cryptocurrencies, giving readers a thorough understanding of its decentralised nature and the potential it has to revolutionise a number of industries outside of banking. The study also looks at the wide variety of cryptocurrencies that have appeared since the popularity of Bitcoin, including Litecoin, Ethereum, and Ripple, among countless others. It explores their distinctive characteristics, use cases, and market dynamics, stressing their potential for financial inclusion, international trade, and smart contract applications. The economic effects of cryptocurrencies are also examined in this paper, along with how they affect decentralised finance (DeFi), traditional banking systems, and financial innovation. It also looks at the difficulties presented by cryptocurrencies, including their volatility, scalability, and security issues, as well as the ongoing discussions surrounding their regulation and widespread use