Digital Currency Research Articles

Central Bank Digital Currency: Driving the Shift Towards a Global Cashless Society

The evolution of money from traditional physical cash to Digital Currency marks a significant paradigm shift in the global financial landscape. This conceptual paper provides an overview of the emerging form of central bank money known as Central Bank Digital Currency (CBDC) and its progression amidst the digitalization era. It discusses the transition from cash to CBDC, exploring global advancements and initiatives. Drawing upon existing literature, it comprehensively addresses CBDC's forms, features, types, motivations, and implications. Specifically, it emphasizes the practical application of CBDC through pilot projects in India, highlighting the interoperability of Unified Payments Interface (UPI) with CBDC, a significant step towards adoption by the Reserve Bank of India (RBI). This study contributes to existing literature by highlighting the necessity for further research to understand the complexities and implications of CBDC adoption, crucial for its widespread acceptance. It underscores the imperative need for additional research and practical exploration to fully understand the ramifications of CBDC adoption, particularly within the Indian context and beyond.

Alternative Forms of Currency: An Exploratory Theoretical Analysis of Bitcoin

Objective: The study aims to critically analyse the role of digital currencies in the context of the monetary system and the challenges and implications for monetary liberalism. Method: Critical review based on an analysis of financial doctrine. A descriptive approach was applied to identify the relevant theories, followed by a critical analysis of the perspectives adopted by the authors. The main theoretical arguments are identified and debated. The methodology enables a critical study to be carried out through comparisons. Results and conclusions: The results highlight the clarity of the arguments, the logical solidity, and the relevance of the evidence presented by the authors. The comparative analysis reveals points of convergence and divergence in the arguments. Inclusive interpretation and reflection allowed the implications of the theoretical approaches for the field of study to be analysed. The conclusions reveal the evidence obtained. Implications if the research: They include an in-depth understanding of the financial theories examined at the level of Bitcoin, highlighting contributions and limitations. Promotes the advancement of knowledge in the theoretical field, identifies possible gaps in the literature, and suggests areas for future research. Provides relevant insights for academia, society, and policymakers. Originality/value: It resides in the application of a critical and analytical approach to financial theories, offering a detailed and contextualised review of the literature. The value comes from providing enlightened insights into the theoretical foundations and possible applications, contributing to the advancement of the academic and social fields.

BitTrace

Bitcoin is a digital currency system built on the foundation of fairness. However, some malicious miners, driven by their own interests, employ unfair tactics such as selfish mining to compete, which disregard the legitimate miners' investments in computational power and energy consumption. In order to assess the efficiency of the Bitcoin system in real-time and promptly detect malicious miners in the network, this paper proposes a data collection framework called BitTrace, which addresses the issues of low efficiency, lack of timeliness, and data loss in traditional data collection frameworks. BitTrace enables real-time collection and analysis of the blockchain formation process, storing it as structured data. Furthermore, the paper discusses factors that influence the efficiency of data collection and proposes a topological control scheme based on the DPC algorithm to enhance the integrity and efficiency of data collection. Researchers can explore various research areas and applications, such as selfish mining detection and legitimate mining strategy research.

From Cash to Central Bank Digital Currency: Can Gen Z Adopt It?

This study aims to examine the intention of youth in Indonesia to adopt Central Bank Digital Currency (CBDC). A sample of 285 respondents was analyzed using SEM-PLS and in-depth interviews. The results of the study found that involvement facilitation, institutional trust, and technology trust had a significant effect on youth's intention to use CBDC. These findings emphasize the importance of building trust in technology and institutions, as well as increasing public confidence in the ability of central banks to launch and regulate CBDC systems. Empirical evidence also shows that facilitation and literacy provided by the authorities need to be a significant focus in addressing potential barriers to technology use among the public. Furthermore, there are maximum literacy facilities and consultation given can increase public confidence in CBDC provider authorities to continue to develop technology to the fullest.

RETRACTED ARTICLE: Economic integration through renewable energy and digital currency in RCEP

RETRACTED ARTICLE: Economic integration through renewable energy and digital currency in RCEP

Negotiating currency internationalization: An infrastructural analysis of the digital RMB

AbstractIn what ways might the digital renminbi (RMB), also known as e-CNY, bolster China’s efforts to internationalize its currency? Utilizing Susan Strange’s concept of currency negotiation and borrowing the concept of infrastructures from science, technology, and society studies, this article argues that RMB internationalization is a gradual process that relies heavily on negotiation involving both state and non-state actors (i.e., private financial authorities). It further argues that while e-CNY may create new opportunities for RMB internationalization, it also raises new challenges. First, the e-CNY’s lack of coordination with other central banks represents a challenge for future evolution and standardization with other digital currency platforms, thus rendering first-mover status a potential disadvantage. Second, as a result of China’s divergent data governance direction from both the US and the EU, the e-CNY is disadvantaged when it comes to interoperability, trust of users, and diversity of data. The purpose of this study is not to predict the future of RMB internationalization once the e-CNY rolls out but rather to highlight various ways in which the latter may influence the former in order to widen analyses of the topic.

The impact of digital currencies on the accounting and audit system

The impact of digital currencies on the accounting and audit system

Central Bank Digital Currency as a New Form of Money

Abstract The possibility of introducing another form of official money, the Central Bank Digital Currency (CBDC), recognised by legislation, has long been discussed worldwide. This paper aims to analyse the advantages and disadvantages of such a solution, as well as to highlight the challenges facing legislatures about the possibility of legalising digital currency and, above all, protecting the rights and freedoms of citizens participating in the process. Due to its technological nature, CBDC is characterised by a much lower level of anonymity than conventional cash, which is often presented as a disadvantage. However, an analysis of this solution seems to weigh in favour of its advantages. One of them is the possibility of using CBDCs to support the process of financial inclusion referred to in the United Nations document Transforming our world: The 2030 Agenda for Sustainable Development. This is an important subject of academic research that can be carried out under the doctrine of financial-market law. Undoubtedly, this matter also has an increasing impact on the practice of financial-market functioning and fiscal and monetary policy decisions. In particular, financial law plays a key role in solving socioeconomic problems and is becoming an instrument for achieving the goals set by the United Nations. The research subject of CBDC is innovative and exploratory, as money, no matter how it is perceived, is, has been and will continue to be an instrument to change the world for the better.

Central Bank Digital Currency and Other Digital Payments in Sub-Saharan Africa

Central Bank Digital Currency and Other Digital Payments in Sub-Saharan Africa

Blockchain Technology: A Framework for Endless Applications

Over the last decade, Blockchain Technology has evolved from being a peer-to-peer implementation of digital currency into a framework for numerous applications. That is, blockchain is widely recognized as the technology behind cryptocurrencies such as Bitcoin, but recent research indicates that it can be exploited way more than that. Among the most notable characteristics of the Blockchain Technology are system decentralization, data immutability, transaction transparency, and user privacy. Thus, it becomes apparent that it can significantly benefit many consumer applications, where trust and security are crucial aspects of the implementation. In this paper, we review and present, in a tutorial manner, blockchain's fundamental postulates and characteristics, and we introduce a novel point of view, where we visualize a layered representation of the blockchain infrastructure, so as to analyze it as a framework. Thinking of Blockchain Technology as a framework may assist consumers to better understand its capabilities and limitations. Additionally, we review emerging blockchain-based applications that span across many different scientific fields. We also discuss the relative merits and restrictions. Namely, we have identified applications in finance, smart contracts, internet of things, e-voting systems, storage and data protection, reputation systems, healthcare, and transportation, indicating that the Blockchain Technology is becoming a framework for endless applications.

A feasible approach to projecting household demand for the digital ruble in Russia

We estimate a model of household use of alternative payment instruments (cash and bank cards) using a new dataset from a survey of Russian households. In our model, household preferences are determined by the perceived attributes of these instruments, and hence their choice regarding payment methods depends on the differences in these characteristics across these instruments. The results indicate that consumer choice is sensitive to the perceived characteristics at statistically significant level. We employ the estimated model to evaluate demand for central bank digital currency (CBDC), based on its expected design and consumer perceptions of it. We discuss several illustrative projections to demonstrate the application of the tool developed. The predicted use of CBDC varies considerably, depending on the perceived characteristics, although the projected use of CBDC in household transactions is limited under conservative assumptions: the projected share of digital rubles in the total number of transactions varies from 18 percent to 35 percent.

Idle liquidity, CBDC and banking

We build models with an interest-bearing central bank digital currency (CBDC) to investigate whether the interest-bearing CBDC can lead to financial disintermediation. In the benchmark model with only CBDC, entrepreneurs can deposit their idle CBDC and banks can hold CBDC to satisfy the reserve requirement. CBDC and bank deposits become complements. A higher CBDC interest rate always promotes investment and may or may not reduce bank lending, because the higher return on CBDC encourages entrepreneurs to accumulate more CBDC and deposit more. More deposits could in turn lead to more bank lending. The interest rate on reserves and the reserve requirement ratio can be effective policy tools that affect bank lending and investment. We consider extensions where cash and interest-bearing CBDC can coexist. The coexistence may require the central bank to adjust the CBDC interest rate or the interest rate on reserves. Our results suggest that the relationship between CBDC and bank deposits are crucial for understanding the effects of CBDC on banking and the macroeconomy.

Crypto Currency and Digital Coins Overtaking the Traditional Banking Sector

Digital currencies and coins are methods of computer-generated currency which uses cryptography for safety and operate individually of a dominant authority, like governments and economic institution. They are spread out and usually utilize blockchain technology to note transactions strongly. Cryptocurrencies such as Bitcoins, Ethereum, and some others have grown popularity in the latest eons for their latent to deliver borderless, secure, and fast transactions. Yet, they also arisen with threats like security concerns, regulatory uncertainty, and price volatility. It is vital for operators to conduct detailed research and comprehend the threats included before capitalizing or utilizing cryptocurrencies. Even though cryptocurrencies and coins have grown famous and are being gradually used for countless transactions, it is significant to remind that they still have not passed the traditional banking systems. Traditional banking sectors still perform an important part in the worldwide economic system, offering services like payment processing, savings accounts, and lending. Conversely, the growth of cryptocurrencies has directed to conferences about the possible influence on the financing sector and the necessity for traditional banking systems to acclimate to the varying setting of digital economics. It is important to observe these growths closely to comprehend the evolving association among the crypto-currencies and system of traditional banking. Hence, the current study gives the deep knowledge in the usage of crypto currencies, digital coins and their role in financial sectors that is dominating the traditional banking sector. And analyzed the impact of crypto currencies and digital coins on investors and economy of the nation and also regarding the easy accessibility of finance.

Digital currency adoption in Africa: A critical review and global comparison

This study critically examines the landscape of digital currency adoption in Africa, providing a comprehensive analysis that juxtaposes the region's progress against global trends. As the world witnesses an accelerating shift towards digital currencies, Africa stands at a crucial juncture in its financial evolution. This research delves into the factors influencing the adoption of digital currencies in various African nations, exploring the socio-economic, technological, and regulatory dimensions that shape their trajectory. The study employs a comparative approach, drawing parallels between Africa's digital currency adoption and global patterns. By examining successful case studies and identifying challenges unique to the African context, the research sheds light on the diverse experiences within the continent. Factors such as financial inclusion, regulatory frameworks, technological infrastructure, and cultural perceptions are scrutinized to unravel the complexities surrounding digital currency adoption. Furthermore, the study investigates the impact of global trends and initiatives on Africa's digital currency landscape. The analysis encompasses the role of international collaborations, regulatory harmonization efforts, and the influence of major digital currencies in shaping the African narrative. By identifying both opportunities and challenges, the research aims to offer insights that can inform policymakers, financial institutions, and stakeholders in fostering a conducive environment for digital currency adoption in Africa. The findings of this study contribute to the academic discourse on digital currency adoption, providing a nuanced understanding of Africa's position in the global digital financial ecosystem. In an era where technological advancements redefine traditional financial paradigms, this research aims to inform strategic decision-making processes that can unlock the transformative potential of digital currencies in the African context.

Accounting for digital currencies: A review of challenges and standardization efforts

In the wake of the Fourth Industrial Revolution, the ascent of digital currencies heralds a transformative era in the global financial landscape, challenging traditional paradigms of currency, commerce, and regulation. This study delves into the emergence, integration, and implications of digital currencies within the global economy, with a particular focus on the accounting and regulatory challenges they pose. Through a meticulous examination of global adoption trends, technological advancements, and the historical evolution of digital currencies, this paper aims to dissect the multifaceted impact of these novel financial instruments on financial reporting, transparency, and regulatory frameworks. Employing a qualitative literature review strategy alongside thematic analysis, the study identifies key challenges in volatility, valuation, transaction anonymity, and the pressing need for standardized accounting practices to enhance comparability and transparency in financial reporting. The investigation extends to the scrutiny of current accounting standards, regulatory responses, and the concerted efforts towards standardization and best practices in digital currency accounting. The findings underscore a critical juncture for practitioners and regulators alike, navigating the intricate accounting landscape shaped by digital currencies. The study culminates in advocating for adaptive regulatory frameworks and standardized accounting practices, emphasizing the necessity of international collaboration and continuous research to harness the potential of digital currencies while safeguarding financial stability and integrity. Recommendations for future research and policy development are proposed to address the evolving dynamics of digital currencies, aiming to support innovation, ensure financial transparency, and maintain regulatory efficacy in the digital age.

Front-running attack in decentralized finance in the metaverse: A systematic review

The Metaverse is a developing mirror of the real world that promises to revolutionize socializing, business, and digital asset connections. Such technology will change the physical world and its environment. Decentralized Finance (DeFi) will completely transform the global financial system. Recent years have seen DeFi transform the financial industry. Since DeFi expanded, banking, insurance, and investing have changed significantly. The decentralized finance sector is growing rapidly, showing that digital currencies and platforms could replace the old financial system. It eliminates expensive intermediaries, lowers transaction costs, and increases financial services access for all, regardless of location or income. Decentralization could provide a risk-free and efficient solution for Metaverse's financial ecosystem, but it has drawbacks. Before implementing financial decentralization, security risks were the main concern. The review paper discusses DeFi's main role in the Metaverse financial ecosystem and security concerns. Front-running attacks are one of the biggest security risks in DeFi, which could cost investors a lot of funds as well as damage the ecosystem.

Explaining variation in national cryptocurrency regulation: implications for the global political economy

While still in their nascent stages, cryptocurrencies have the potential to reshape the international political economy by hastening the end of US dollar hegemony and reducing the US’s coercive financial power. Recently, governments have adopted various regulatory approaches to these new technologies. Most commonly, countries have implemented an array of partial and absolute bans. What explains governments’ responses to the new and potentially disruptive technology? We argue that governments’ decisions to ban cryptocurrencies stem from their desire to maintain monetary control. While cryptoization threatens all governments’ monetary policy autonomy, governments who choose to fix their exchange rates and restrict cross-border movement of capital are most motivated to ban crypto because digital currencies can be used to evade exchange and capital controls. A country’s regime type also affects its ability to enact bans; democracies will be less likely to enact a ban than autocracies. Our results suggest that cryptocurrency threatens the international political and economic status quo less than many speculate because regimes most likely to be at odds with US monetary and financial dominance face a strong incentive to ban the technologies in their own countries.

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A critical evaluation of Central Bank Digital Currencies (CBDCs): payments’ final frontier?

Abstract Central Bank Digital Currencies (CBDCs) are the latest advancement in the area of digital money and payments. CBDCs would constitute a claim on the central bank, a central bank liability; CBDCs may be not only for domestic use, as, subject to the connectivity of the chosen type of technology, the digitization of international payments means that some CBDCs may potentially be used on a cross-border basis. One key challenge concerning CBDCs refers to the preservation of the privacy of citizens’ payments. Another is the role to be played by the private banking sector in the distribution and storage of CBDCs. A number of rationales have been suggested for the introduction of CBDCs, from financial inclusion to making innovation work for the common good. On the other hand, there is no widespread consensus as to the utility of CBDCs. The majority view is that CBDCs will be introduced as a form of digital money that is entirely distinct from cryptocurrencies, and will remain so.

A Study on Influencing Factors of Willingness to Use E-CNY Based on Logistic Model

The development of mobile technology has facilitated the widespread adoption of digital currency worldwide. An important application of mobile technology is digital currency, which has gained global popularity due to its blockchain and peer-to-peer mobile payment mechanisms. The emergence of private digital currencies, such as Bitcoin, poses a challenge to the monetary policy of governments. To address this threat, many central banks are developing their own central bank digital currencies (CBDCs) with legal support. China’s CBDC, e-CNY (electronic China Yuan), is one of the most advanced examples of this innovation. However, the adoption and usage of e-CNY by residents is still limited and requires improvement. This paper aims to identify and analyze the factors that influence residents’ willingness to use e-CNY, based on a literature review and a logistic regression model. The results indicate that residents’ awareness, convenience, cost, promotional activities, and the involvement of relevant parties (merchants, commercial banks, payment institutions, and the People’s Bank of China (PBC)) significantly influence their willingness to use e-CNY. This paper presents implications and suggestions for promoting and implementing e-CNY in China.