Could Virtual Currencies Replace Classic Money and Influence the Activities Of Banks?

Abstract

Abstract This article analyses the concept of virtual currencies by examining the origin and evolution of money in its’ classical form, identifies why classic money needs to evolve and why virtual currencies could represent the next step in their evolution (Vlasov, 2017). With the emergence of Bitcoin, terms as ‘blockchain technology’ and ‘virtual currencies’ have gained great notoriety. One of the reasons virtual currencies became so popular is that people believe that they could be very promising and could be capable to replace money in their traditional form. This being considered, the article tries to achieve the following objectives: to provide an overview on the evolution of money; make a comparison between virtual currencies and classic money; analyse the potential of virtual currency to replace fiat money (Jumde & Cho, 2020). The focus of this article was to gain a holistic insight into the new technology and its power to revolutionise the financial system. The study was performed by comparing various sources and examining existing studies, official reports issued by the EU institutions, opinions of various experts and financial journals articles, in order to create knowledge on the topic, as well as the author’s interpretation of the research material.