Alternative Currencies Research Articles

Cross-country spillover effects of interest rate and credit constraint policies

Both rising interest rates and tighter credit constraints decrease investors’ funding positions in a given currency and cause the currency to appreciate. I extend the Gabaix and Maggiori (2015) global multi-country currency and bond model and show that the policy interventions have opposite effects on the value of an alternative funding currency through investor positioning. Rising interest rates encourage investors to shift their positioning and cause the alternative currency to depreciate. Tightening credit conditions have the contrasting effect and prompt appreciation for both currencies. Empirical evidence on Japanese Yen returns is consistent with the model.

Alternative currencies, community support and social cohesion: why the Okinawan moai (模合) is closer to an informal social policy mechanism than to a standard ROSCA

To challenge the notion of the Okinawan moai as a Rotating Saving and Credit Association, this article provides a short overview of the practice before reflecting on an interesting pattern. While moai has been phased out in most of Japan, it persists in some areas where, incidentally, life expectancy is higher than the rest of the country (and of much of the rest of the world). Expanding upon the idea that moai’s main function is social rather than economic makes it possible to suggest the existence of alternative currencies that, although less tangible than money, have a major role in the people’s lives, create mutual dependency and ultimately enhance people’s wealth, intended here to refer not to economic wealth but also in a more inclusive or socially mediated manner including social relations, happiness, a sense of protection and so on.

Research Paper on Blockchain Technology

Blockchain is a Peer to Peer software technology that protects the integrity of a digital piece of information. It was invented to create the alternative currency Bitcoin but may be used for other cryptocurrencies, online signature services, voting systems and many other applications. In this video we explain how it works and what makes it special. Everyone uses paper money. When you get a 10 dollar bill you trust that it's not fake. If instead someone sent you an email saying "here's 10 dollars" you probably wouldn’t trust it. But when we "transfer money", use an ATM or pay with a deposit card that's pretty much exactly what we do. We're sending money in a digital message. To make sure no one's cheating or sending money they don't have, these “messages” go through a few trusted banks that keep a record of everything. They know how much money everyone has and deduct it properly for every transaction. Now But this has become expensive when there is a millions of transactions around towards the world every minute. The Economist estimates that banks charged us more than 1.7 trillion dollars to process these payments in 2014. That’s about 2% of the entire world economy! With blockchain we can save a lot of this cost because it lets us send money just like sending an email. Alternately sending a lot of payment information through a few servers, blockchain uses thousands of personal computers on the internet. All transactions are copied and cross checked between every computer in a system wide accounting book called the ledger, which becomes very safe at scale. Blockchain doesn’t just allow us to create safe money online, it lets us protect any piece of digital information. This could be online Identity cards, voter ballots, contracts and many other “legal instruments”, bringing bureaucracy into the 21st century.

US Dollar Dominance in International Trade and the Impact of Trump’s Policies

This paper delves into the status of the US dollar as a world reserve currency and its profound impact on China's economy. It emphasizes the significance of capital account convertibility for governments and advocates the necessity for reform in the international monetary system. The study sheds light on China's remarkable economic growth and its reliance on the US dollar, while also exploring the emergence of an alternative currency basket featuring the Chinese yuan (RMB). With the gradual depreciation of the US dollar on the horizon, the potential consequences for China's economy are thoroughly examined.Additionally, the paper addresses the risks associated with de-dollarization and the potential flight of USD-denominated debt to alternative assets like gold. A detailed analysis of how Trump's economic policies, especially the trade war with China, have impacted the global role of the US dollar is presented. Furthermore, the paper provides a comprehensive historical review of the international monetary system, spanning from the gold standard to the Bretton Woods system and the Jamaican system. It critically discusses the flaws and instability inherent in the current system, including issues related to currency over-issuance and the multi-currency reserve system.In conclusion, the paper examines the policy signals of the Federal Reserve and the US Treasury, along with the ramifications of Trump's economic policies on the US dollar and the global economy. The findings underscore the urgent need for measures to address the challenges posed by the current monetary system and its potential impact on China's economy. The study advocates for a proactive approach to international monetary system reform to ensure economic stability, promote balanced global economic growth, and address the complexities arising from the dominant status of the US dollar as a world reserve currency.

International energy trade and inflation dynamics: The role of invoicing currency use during the low carbon transition

In most international energy trades, the US dollar is the invoicing currency. Our empirical and theoretical analysis examines how this affects inflation dynamics in energy trade. Empirical results reveal that countries’ with higher shares of trade invoiced in dollars would experience more inflation in their energy sector, primarily because of exchange rate fluctuations. Theoretical modeling, based on a new open economy Keynesian framework, demonstrates that when all products are priced in US dollars, imported inflation varies with exchange rates. We observe that the dominant issuer’s monetary policy has greater spillover effects than non-dominant countries. Furthermore, in a counterfactual analysis, we consider invoicing conventional energy products in dollars while invoicing renewable energy products in alternative currencies. The results highlight two benefits of currency coordination in renewable energy products: a domestic monetary policy would be more effective, and the foreign monetary policy produces fewer spillovers to domestic inflation.

Cryptocurrency and African fiat currencies: A peaceful coexistence?

AbstractThis study examines the asymmetric behaviour of Bitcoin relative to six major African fiat currencies (Egyptian Pound, Cedi, ZAR, Naira, Rupee and Dinar) for the period 10 August 2015 to 31 December 2022. The time and frequency information in the time series of the currencies were captured applying the ensemble empirical mode decomposition. The quantile regression (QR) and quantile‐in‐quantile regression (QQR) were applied on the decomposed series to examine the connections among the currencies at different currency regimes across time. The empirical results show that both QR and QQR can adequately capture the time‐varying asymmetric behaviour of the currencies across time. The results range from weak to very strong dependencies albeit both negative and positive across different quantiles. Our findings suggest that except for ZAR, Bitcoin is a viable alternative currency to African reserve currencies from the medium‐term since it can hedge depreciation and forex risk of the fiat currencies. Based on the findings of this study, we recommend that forex traders and policymakers in Africa should adopt Bitcoin as an alternative currency to African currencies in the medium‐term to mitigate currency crises in the continent.

A Bayesian DSGE approach to modelling cryptocurrency

We develop and estimate a DSGE model to evaluate the economic repercussions of cryptocurrency. In our model, cryptocurrency offers an alternative currency option to government currency, with endogenous supply and demand. We uncover a substitution effect between the real balances of government currency and cryptocurrency in response to technology, preferences and monetary policy shocks. We find that an increase in cryptocurrency productivity induces a rise in the relative price of government currency with respect to cryptocurrency. Since cryptocurrency and government currency are highly substitutable, the demand for the former increases whereas it drops for the latter. Our historical decomposition analysis shows that fluctuations in the cryptocurrency price are mainly driven by shocks in cryptocurrency demand, whereas changes in the real balances for government currency are mainly attributed to government currency and cryptocurrency demand shocks.

SELECTION OF THE BEST B-SPLINE REGRESSION MODEL FOR ESTIMATING BITCOIN PRICE INCREASES BASED ON ORDER AND OPTIMAL KNOT POINT

The cryptographic virtual currency, bitcoin, is considered the main originator of cryptocurrencies that emerged due United States financial crisis in 2008. The idea was sparked by Nakamoto by introducing an alternative currency system that really refers to the strength of supply and demand. Based on INDODAX data, the bitcoin exchange rate during October 2020 to February 2021 is a condition of a large increase in a short time with a percentage increase of 450%. The increase in bitcoin prices can be modelled using the b-spline nonparametric regression method based on order and optimal knot points based on the smallest Generalized Cross Validation value. The resulting b-spline 4 degree and the number of knots points 5 as the best model with each bases described recursively.

The future prospects of cryptocurrencies and their impact on financial markets

This article examines the future prospects of cryptocurrencies and their impact on financial markets. First, the article introduces the definition of cryptocurrencies. The article then analyses the future prospects for cryptocurrencies, including the impact of technological advances on cryptocurrencies, the growth trends in the cryptocurrency market, and their potential as alternative currencies. The article then examines the impact of cryptocurrencies on financial markets, including financial innovation and ecosystem change, market volatility and risk. Finally, the article summarises the future prospects for cryptocurrencies and the impact on financial markets, and highlights the importance of balancing regulatory compliance and innovation.

The Physiology of Money

This article presents an ethnography of alternative currencies that foregrounds the notion of “circulation”. Building upon a long legacy wherein money is equated with a primary life force—being either water or blood—that is contained within a body, “circulation” became a dominant metaphor for the use of money from the mid-seventeenth century onwards. Imagining money as a liquid that flows and circulates means that remedying economic inequalities and injustice is often reduced to a matter of redistribution. Instead, money is itself an institutional project engineered to distribute resources and authority based on a philosophy of growth and accumulation. Alternative currency initiatives aim to re-design, rather than re-distribute, money. Importantly, they believe the technological fix of a circular software system effectively does away with the inequalities of the capitalist mode of production. What happens when on-going practices towards systemic change converge on money and the economic “body” of a local community is imagined as software?

An Economic Appraisal of Blockchain’s Impact on Finance and Market Competition

This paper provides an economic appraisal of blockchain technology's impact on the two representative pillars of an economic system: finance and market competition. It is argued that although cryptocurrencies designed upon blockchain technology are perceived as alternative currencies and speculative financial assets today, their roles are limited in the economic sense. However, blockchain technology can promote market competition in the internet sector by the virtue of decentralization. In comparison to the highly concentrated market power of current internet companies, new dynamics of market competition based on Web3 are discussed.

Failing Forward

This article analyzes efforts to institute professionally designed alternative currencies in European cities as acts of creative experimentation. The alternative currency consultants, or “the Money Makers,” experiment profusely with alternative moneys. As such, they have instituted various currencies throughout Europe from the 1990s onward—many of which have been funded by political bodies. Alternative moneys never succeeded in the sense that they never achieved their ambitious goal of creating resilient, localized economies. The article outlines how this rapid rise and fall of currency forms is interpreted by the Money Makers as a positive route of discovery toward a fair economy, an attitude of “failing forward.” Never quite successful, never quite finished, never just-right—to fail forward means that failure is not only imminent, it is required to attain success. New currencies are continuously created as reinventions upon themselves and upon capitalist practice. The notion of failing forward is key to understanding the creative design of currency alternatives as carrying within itself not only hopes for the future but also the history of prior forms as well as the current dynamics of neoliberal capitalism. The article argues therefore that creativity, as developing the “alterity” of “alternative economies,” is a collective enterprise that is institutionally shaped.

How Far Does the Diverse Economies Approach Take Us?

How Far Does the Diverse Economies Approach Take Us?

"Crawling" de-dollarization of the world economy

With the death of the Bretton Woods system in 1971 the world has entered in an era of fiat money. As Andrey Burovski once said, the United States created an empire of completely different type — a money empire. The dollar has become a backbone of the world economy, and the Federal Reserve System — a central bank of the world. The power of the System, sometimes limited by Washington’s foreign policy interests, allows America to control who gets what and when. The source of the power is the right of the System to create nation’s currency (in fi nancial terms) and change bank reserves. Absent global political and economic turmoils, weakening the dollar as preferred storage of wealth and means of payment relative to alternative currencies, the dollar will dominate world trade and fi nance in the foreseeable future. Meanwhile challenges on the part of alternative currencies are limited to what may be called "crawling" de-dollarization. The American economy is vulnerable to various shocks of the world economy, and the Federal Reserve System closely cooperates with monetary authorities of many countries in order to protect fi nancial stability overseas. Exporting the dollar by means of swap lines, the System behaves as the central bank of the entire world. These "pipelines" of emergency liquidity connect the United States with its major trading partners and in the end serve American economic interests. America needs world trade as well, that is why the System opens to central bank access to unlimited supply of American money (which it issues) as if they are domestic banks looking for loans.

Univariate Time Series Analysis of Cryptocurrency Data using Prophet, LSTM and XGBoost

Abstract: Cryptocurrency, also known as crypto, is any digital or virtual currency that uses cryptography to safeguard transactions and circulates without the authority of a central bank. Bitcoin, the first and most widely used decentralized cryptocurrency, was introduced in 2009. After a few years of unrivalled dominance, it lost its monopoly in 2011, when the first competitive alternative currencies arose. As of November 2022, there are almost 21,000 cryptocurrencies in circulation. Because there is no government credit backup, cryptocurrency prices are typically volatile. The cost of one Bitcoin rose from zero at its debut in 2009 to $13 in 2013 and then to $68789 in 2021, with numerous shifts and fluctuations along the way. The accurate forecasting of the Bitcoin price is critical for investors to make decisions and for governments to create regulatory laws. This paper examines the ability of the models - Prophet, Long Short-Term Memory (LSTM), and eXtreme Gradient Boosting (XGBoost) to predict the price of Bitcoin reliably. Using the performance metrics like RMSE, each model was thoroughly trained and tested to discover which one operates more efficiently. After examining the price of Bitcoin from 2012 to 2021, we concluded that the Long Short-Term Memory (LSTM) model proves to be the most efficient when dealing with variable and difficult-topredict data such as Bitcoin values since it portrays promising results in comparison

Stability Analysis of the Dinar Dirham as an Alternative Currency for the Islamic World

The dinar and dirham can last decades to become a formidable medium of exchange, as gold and silver have the highest suitability as money rather than commodities. However, some people believe there are alternative currencies besides gold and silver. Starting to implement and use the dinar and dirham currencies is part of muamalah activities. The wheel of Islamic economics is driven by the dinar and dirham cycle, where a currency is used as a medium of exchange, storage, or fair value of wealth. This will lead to the prosperity of humanity. This study aims to find out evidence of the stability of the dinar and dirham values by using qualitative research methods which are methods of understanding and extracting meaning from what happens to various individuals or groups, originating from humanitarian or social problems. Sources of data obtained from textbooks, journals, manuscripts, etc., and sources obtained from trusted websites. The dinar and dirham currencies are alternatives that can be used as a medium of exchange in the current economy so that the period of socialization and education for the community must be in collaboration with other factors in various elements of society, the world of education, and most importantly the policies made by the government are in line with in tune with the principles of Islamic economics in various aspects of life.

Stability Analysis of the Dinar Dirham as an Alternative Currency for the Islamic World

The dinar and dirham can last decades to become a formidable medium of exchange, as gold and silver have the highest suitability as money rather than commodities. However, some people believe there are alternative currencies besides gold and silver. Starting to implement and use the dinar and dirham currencies is part of muamalah activities. The wheel of Islamic economics is driven by the dinar and dirham cycle, where a currency is used as a medium of exchange, storage, or fair value of wealth. This will lead to the prosperity of humanity. This study aims to find out evidence of the stability of the dinar and dirham values by using qualitative research methods which are methods of understanding and extracting meaning from what happens to various individuals or groups, originating from humanitarian or social problems. Sources of data obtained from textbooks, journals, manuscripts, etc., and sources obtained from trusted websites. The dinar and dirham currencies are alternatives that can be used as a medium of exchange in the current economy so that the period of socialization and education for the community must be in collaboration with other factors in various elements of society, the world of education, and most importantly the policies made by the government are in line with in tune with the principles of Islamic economics in various aspects of life.

International Trade in the Post-Soviet Space: Trends, Threats, and Prospects for the Internal Trade within the Eurasian Economic Union

This paper discusses the dynamics of foreign trade in the post-Soviet space within the Eurasian Economic Union (EAEU) during the period from 2015 to 2021. Additionally, the paper analyzes export indicators in foreign and mutual trade of the EAEU member countries and diversification of the commodity structure as well as its dynamics based on the commodity concentration index for each member country. Our paper identifies the strengths and weaknesses of the EAEU, analyzes the opportunities and threats of development, and focuses on the trends and prospects. The main strengths include the institutional and legal structure of the EAEU single market, the historical, cultural, and economic proximity of the EAEU member countries, the transit potential of the territory, the high level of domestic trade, and the increasing share of ruble transactions in the trade turnover. The most significant weaknesses are the low efficiency of the institutional structure, the gap in the socio-economic level of development of the participating countries, unstable geopolitical situations in some member countries, the low level of recognition of the EAEU in the world market, economic and political conflicts of interests of the member countries, and the dependence on Western technologies in some key industries. Strategically important opportunities can be found in the creation and implementation of a long-term development strategy, diversification of trade with the Middle East and Asian countries, expansion in terms of the territorial composition, development of the institutional and legal structure as well as cooperation ties, as well as the cooperation in the field of technological innovation and financial security. Among the most significant threats were identified the outpacing growth in the share of EAEU members’ trade with China, the expansion of economic and political contradictions between the EAEU member countries, and the strengthening of the positions of alternative currencies in foreign trade.

ETHEREUM CRYPTOCURRENCY PRICE MOVEMENT PREDICTION SYSTEM USING TRIPLE EXPONENTIAL SMOOTHING METHOD

An innovation that was sparked is an alternative currency to replace conventional currency, namely digital currency that is secured using a cryptographic method called Cryptocurrency. However, cryptocurrency prices cannot be controlled, causing massive fluctuations. Cryptocurrency price changes are very stable due to several factors such as speculation from users and the nature of the follow-up from new to one of the causes. The cause of this bandwagon is due to extreme price increases in a short time, even within a day the price of Crypto can experience a difference of millions of rupiah for each increase and decrease. To answer this question, we need a software that can predict the Rupiah exchange rate. By using the Triple Exponential Smoothing prediction method. In implementing Triple Exponential Smoothing, historical data is needed which will later be processed to produce prediction results, for that we need parameters that can be used as historical data counters, in this study used parameters 0.40 as parameters Xt and S't and 0.60 as Beta parameters. In the process, starting from calculating the first to third smoothing, ensuring Constants, Slopes, and Parabolics, to completing the process by producing Forecasting, the results of the measurement of the margin error level with a margin of error of 0.94638% using data for the final 2021 period, which is between November - December on the Triple Exponential implementation simulation and on the implementation into the system that has been developed is 3.7249% using data from May 2022 to June 2022

Investment in Virtual Digital Assets Vis-A-Vis Equity Stock and Commodity: A Post-Covid Volatility Analysis

Virtual digital assets including cryptocurrencies, non-fungible tokens and decentralized financial asset have been initially used as an alternative currency but are currently being purchased as an asset and hedging instruments. Exponentially growing trading volume witnesses the growing inclination of investors towards these assets, and this calls for volatility analysis of these assets. In this reference, the present study assessed and compared the volatility of returns from investment in virtual digital assets, equity and commodity market. Daily closing prices of selected cryptocurrencies, non-fungible tokens and decentralized financial assets, stock indices and commodities have been analysed for the post-covid period. Since returns were observed to be heteroscedastic, autoregressive conditional heteroscedastic models have been used to assess the volatility. The results indicate a low correlation of commodity investment with all other investment opportunities. Also, Tether and Dai have been observed to be negatively correlated with stock market. This indicates the possibility of minimizing risk through portfolio diversification. In terms of average returns, virtual digital assets are discerned to be better options than equity stock or commodity yet the variance scenario of these investment avenues is not very rosy. The volatility parameters reveal that unlike commodity market, virtual digital assets have got a significant impact of external shocks in the short-run. Further, the long run persistency of shocks is observed to be higher for the UK stock market, followed by Ethereum, Tether and Dai. The present analysis is crucial as the decision about its acceptance as legal tender money is still sub-judice in some countries. The results are expected to provide insight to regulatory bodies about these assets.