Future of Money: Cryptocurrencies, Blockchain Technology and Central Bank Digital Currency

Proceedings of The 4th International Academic Conference on Management and Economics

Year: 2021

DOI:

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Future of Money: Cryptocurrencies, Blockchain Technology and Central Bank Digital Currency

Esra Kabaklarlı

ABSTRACT: 

Technological developments have made it possible to increase the money supply without any central bank decisions. For example, if a government decides to increase money supply, central banks use expansionary monetary policy tools. After the covid 19 pandemic the money supply has dramatically increased through fiat money and cryptocurrencies around the world. CBDCs (Central Bank Digital Currency) are an institutional response to the threat of alternative forms of future money like cryptocurrencies. Central banks will not give up  seniorage advantage using printing money rights. . Economies and central banks monitoring decentralized technologies in finance with the emergence of cryptocurrencies.  CBDC’s will be based on decentralized databases which is the technological infrastructure underpinning blockchain and cryptocurrencies. This article assesses the cryptocurrencies, and Central Bank Digital Currency from economic and technological perspectives. This paper focuses on the CBDC macroeconomic perspective which will have effects on inflation, interest rates and economic growth. Also in this paper the relationship and connection between the CBDC, cryptocurrency and blockchain technology will be analyzed reviewing the literature.

keywords: Money, CBDC, Blockchain.