Can digital currency technology help reduce transaction costs and improve access to financial services for underbanked populations?
Subject Areas : Agriculture Marketing and Commercialization
Bouayed Sarra
1
(Algeria)
Keywords: Digital Currency, Financial Services, Transaction Costs,
Abstract :
Research on the impact of digital currency technology on exchange costs is progressing, with studies highlighting various aspects. Blockchain technology is seen as a mechanism that can reduce transaction costs by enforcing contract execution through encryption, bringing transactions closer to the conditions of a perfectly competitive market. Additionally, digital currency issuance can influence currency circulation speed and money multiplier, affecting financial system risk and supervision. While the influence of Bitcoin on exchange rates is noted to be negligible, the importance of embracing decentralization and digital money for cost reduction and transparency in enterprises is emphasized. Furthermore, the introduction of central bank-issued digital currencies (CBDCs) is being explored, with different design options impacting transaction costs for various stakeholders. Research on the impact of digital currency technology on exchange costs is progressing, with studies highlighting various aspects. Blockchain technology is seen as a mechanism that can reduce transaction costs by enforcing contract execution through encryption, bringing transactions closer to the conditions of a perfectly competitive market. Additionally, digital currency issuance can influence currency circulation speed and money multiplier, affecting financial system risk and supervision. While the influence of Bitcoin on exchange rates is noted to be negligible, the importance of embracing decentralization and digital money for cost reduction and transparency in enterprises is emphasized. Furthermore, the introduction of central bank-issued digital currencies (CBDCs) is being explored, with different design options impacting transaction costs for various stakeholders.
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