The Influence of Digital Currency on the Banking Sector in Europe

Jakšić Milena (), Todorović Violeta () and Matić Jelena ()
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Jakšić Milena: University of Kragujevac, Faculty of Economics, Republic of Serbia
Todorović Violeta: University of Kragujevac, Serbia, Faculty of Economics, Republic of Serbia
Matić Jelena: University of Kragujevac, Serbia, Faculty of Economics, Republic of Serbia

Economic Themes, 2022, vol. 60, issue 4, 481-494

Abstract: Historically, financial and monetary innovations have triggered positive and negative changes in the everyday operations of the financial sector. Similarly, digital currencies can significantly reshape the future of banking and financial intermediaries. Whether the aspect of digital currencies is through the public sector such as in central banks, digital currencies, or private means such as in cryptocurrencies, the eventual rollout of such innovative instruments has a critical influence on the retail use of digital assets. At the same time, digital currencies may create new risks and vulnerabilities in the financial or banking sector whose implications should be thoroughly assessed. However, the magnitude of the risks depends on the designs and policies attached to the digital currencies in use. These features of digital currencies trigger the subject of discussion in this paper. By outlining the benefits and risks associated with digital currencies in the banking sector, the paper aims to highlight the overall impact of digital currencies in the banking sector and available remedies to control the risks. Therefore, the paper provides information that is critical to the banking sector policymakers interested in digital currencies.

Keywords: Digital Currencies; Banking Sector; Benefits; Risks; Design; Policies (search for similar items in EconPapers)
JEL-codes: E5 E58 G23 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecothe:v:60:y:2022:i:4:p:481-494:n:6

DOI: 10.2478/ethemes-2022-0026

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