As we move forward, incidents such as the Covid-19 pandemic demonstrate the importance of having access to multiple means of payment. With the growth of digital payment options, the topic of e-money and its economic impact has increasingly come into academic focus. The aim of this bachelor thesis is therefore to summarize the current state of research on digital currencies and to provide new insights into their impact on payments and monetary policy. This study concentrates mainly on the European market with a particular emphasis on the Eurozone.
Using recent literature and academic studies, a literature review examines the impact of digital currencies on monetary policy. Further, this paper develops and demonstrates new insights about digital currencies in a quantitative empirical study. The quantitative analysis was chosen in order to obtain measurable values for comparison. From this, the following research question can be derived: How could digital currencies potentially impact electronic payments
and monetary policy in the Eurozone?
Following the introduction, chapter two provides the reader with a comprehensive and in-depth examination of theoretical foundations. To this end, the terms currency and money are clarified, and different payment systems are discussed. In addition, business models based on companies are presented, as well as monetary policy and the ECB are explained in more detail. After the theory section, the third chapter covers the approach, the empirical method, and the data collection and analysis procedures. Subsequently, chapter four presents the research results to provide an answer to the research question. The fifth chapter deals with the discussion, including hypothesis testing. The final section completes the thesis with a conclusion.
Table of Contents
1 Introduction
1.1 Objective
1.2 Structure
2 Theoretical background
2.1 Currencies
2.1.1 Physical money
2.1.2 Digital currencies
2.1.3 Implementation of digital currencies
2.2 Payment systems
2.2.1 Classical payment systems
2.2.2 Electronic payment systems
2.2.3 Security and data protection
2.3 Business model
2.3.1 Banks
2.3.2 Paypal
2.3.3 Apple Pay
2.4 Monetary policy
2.4.1 Organization structure and responsibilities of the ECB
2.4.2 Money supply
3 Methodology
3.1 Hypotheses
3.2 Research approach
3.3 Data set and preparation
3.4 Research Quality
3.5 Python (Tool)
3.6 Weaknesses
4 Analysis
4.1 Pearson correlation
4.2 Sample presentation
4.3 Correlation Matrix
4.4 Test of Significance
4.5 Regression Analysis
4.5.1 DGP - CPT
4.5.2 DGP - BAC
4.5.3 DGP - M1
4.6 Literature analysis
4.6.1 Advantages and disadvantages
4.6.2 Pilot project digital yuan
5 Discussion
5.1 Hypotheses Testing
5.2 Scope and limitations
6 Conclusion
Research Objectives and Key Topics
This bachelor thesis investigates the potential influence of digital currencies on electronic payment systems and monetary policy, specifically within the Eurozone, by synthesizing academic literature with an empirical quantitative analysis.
- Evolution of money and payment systems
- Impact of digital currencies on consumer payment behavior
- Technological frameworks of digital currencies (DLT, Blockchain)
- Central Bank Digital Currency (CBDC) implementation and monetary policy implications
- Quantitative assessment of relationships between digital payments, crypto adoption, and financial aggregates
Excerpt from the Thesis
2.1.2 Digital currencies
"The one thing that's missing, but that will soon be developed, is a reliable e-cash, a method whereby on the internet you can transfer funds from A to B, without A knowing B or B knowing A. That kind of thing will develop on the internet, and that will make it even easier for people to use the internet.", said the American economist Milton Friedman in 1999 (Sixt; 2017).
In a case study from 2012, the European Central Bank categorized digital currencies as virtual representations of value that can be used to some extent as an alternative to money. This report on 'virtual currency schemes' specified such currencies as unregulated digital money. They are typically issued and controlled by their creators and used by members of a particular online community. Based on interaction with traditional currencies, three different types of virtual currencies can be distinguished (EuropeanCentralBank; 2012):
Chapter Summaries
1 Introduction: Provides the context of the shift toward digital payments accelerated by the global pandemic and defines the research goal of evaluating the impact of digital currencies in the Eurozone.
2 Theoretical background: Explores the history of money, modern payment systems, business models of payment providers, and the operational structure of the European Central Bank.
3 Methodology: Details the research strategy, consisting of a mixed-methods approach using quantitative data analysis and qualitative literature review to test formulated hypotheses.
4 Analysis: Performs statistical correlation and regression tests on financial indicators and presents a qualitative literature assessment regarding digital euro projects and international experiences.
5 Discussion: Interprets the statistical findings, confirms four out of five hypotheses, and highlights the limitations of the current study regarding data availability.
6 Conclusion: Summarizes the thesis findings, confirming that digital currencies significantly influence payment landscapes and are a critical factor for future monetary policy considerations.
Keywords
Digital Currencies, Electronic Payments, Monetary Policy, Eurozone, CBDC, Cryptocurrency, Blockchain, DLT, M1, Financial Stability, Payment Systems, Correlation Analysis, Regression, Fintech, Digital Euro
Frequently Asked Questions
What is the core focus of this research?
The work examines how the rise of digital currencies influences electronic payment systems and monetary policy, with a focus on the Eurozone.
Which thematic areas are central to the work?
Key topics include the evolution of currency, the transition to digital payments, the role of Central Bank Digital Currencies (CBDCs), and their potential impact on monetary policy and central banking.
What is the primary research question?
The paper asks: "How could digital currencies potentially impact electronic payments and monetary policy in the Eurozone?"
Which scientific methods are applied?
The study uses a mixed-methods approach: quantitative analysis (correlation and regression tests) using World Bank and Fed data, combined with a qualitative literature review of institutional studies.
What does the main body cover?
It covers theoretical foundations of money, an analysis of payment service business models, statistical evaluation of national financial data, and a review of pilot projects like the digital yuan.
Which keywords characterize this work?
Essential keywords include Digital Currencies, Monetary Policy, Eurozone, CBDC, Cryptocurrency, and Financial Stability.
How is the European Central Bank involved in these developments?
The ECB is actively researching digital euro projects to ensure monetary sovereignty and efficient payment landscapes in response to private sector competition.
What does the correlation analysis reveal about crypto adoption?
The analysis indicates a strong negative correlation, suggesting that as electronic payment options become more prevalent in a country, the reliance on cryptocurrencies tends to be lower.
What are the implications for commercial banks?
The research discusses the potential for "disintermediation," where the introduction of a digital currency by a central bank might reduce the reliance on commercial bank deposits.
Is a digital euro currently recommended?
The study concludes that a digital euro could have a positive impact on monetary policy and suggests its development is a feasible and important step for future financial stability.
- Citar trabajo
- Diana Breidenbach (Autor), 2021, Potential Impact of Digital Currencies on Electronic Payments and Monetary Policy in the Eurozone, Múnich, GRIN Verlag, https://www.grin.com/document/1245611
