How do private digital currencies affect government policy?

Max Raskin, Fahad Saleh and David Yermack

Journal of Financial Stability, 2024, vol. 73, issue C

Abstract: We provide a systematic classification and evaluation of the different types of digital currencies. We express skepticism regarding centralized digital currencies and focus our economic analysis on private digital currencies. We specifically highlight the potential for private digital currencies to improve welfare within an emerging market with a selfish government. In that setting, we demonstrate that a private digital currency not only improves citizen welfare but also encourages local investment and enhances government welfare. The fact that a private digital currency enhances government welfare implies a permissive regulatory policy which enables citizens to realize the previously referenced welfare gains.

Keywords: Digital Currency; Cryptocurrency; Cryptoasset; Blockchain; Bitcoin (search for similar items in EconPapers)
JEL-codes: G00 O10 O20 P00 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:73:y:2024:i:c:s1572308924000664

DOI: 10.1016/j.jfs.2024.101281

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