The rise of electronic currencies
The institution of money is swiftly evolving due to advances in computer-based cryptography. Technological innovation has prepared the ground for electronic cash-like instruments that no longer require expensive financial intermediaries we use presently to settle payments. Due to technical advances, it is possible to create cost-effective electronic alternatives to coins and banknotes, which are the conventional physical currencies. The newer currencies that are variously called crypto, digital, and electronic currencies have already been supplied by private issuers.
These electronic alternatives are as convenient as debit cards, potentially safer than deposits and cheaper to use while being as peer-to-peer as the traditional cash. Consequently, there is significant interest from both public and private financial institutions to understand whether or not there is an opportunity for currency innovation…
Sources:
1. Camera, G. (2017). A perspective on electronic alternatives to traditional currencies. Sveriges Riksbank economic review, 1, 126–148.
2. Dwyer, G. P. (2015). The economics of Bitcoin and similar private digital currencies. Journal of Financial Stability, 17, 81–91.
