What are the barriers to the acceptance of cryptocurrencies in the German economy?

Master's Thesis, 2018

123 Pages, Grade: 1,3



Table of Contents

i. Abstract

ii. Table of Contents

iii. List of Figures

iv. List of Tables

v. Abbreviations

1.1 Initial Situation
1.2 Objective & Research Approach
1.3 Theoretical & Practical Relevance
1.4 Methodology & Structure

2. History of Money
2.1 The types & functions of Money
2.1.1 Medium of Exchange
2.1.2 Unit of Account
2.1.3 Store of Value
2.2. Cryptocurrency: A paradigm shift
2.3 Types of Cryptocurrencies
2.3.1 Type 1: Closed Virtual Currency Schemes
2.3.2 Type 2: Virtual Currency Schemes With Unidirectional Flow
2.3.3 Type 3: Virtual Currency Schemes With Bidirectional Flow

3. Monetary policy’s cryptocurrency challenge
3.1 The impact on the European Monetary System & Money Supply
3.1.1 Monetary Aggregate
3.1.2 Fractional Reserve Banking
3.1.3 Distributed ledger money and Austrian policy objectives

4. Empirical Part
4.1 Monetary Theory and Potential Use Cases of Cryptocurrencies
4.1.1 Central Bank Issued Digital Currency (CBDC)
4.1.2 Private Cryptocurrencies as an Alternative Currency
4.2 Research Design and Process
4.2.1 Theory Models of Adopting Cryptocurrencies
4.2.2 Research Quality
4.3 Research Method and Data Collection
4.3.1 Selection of Interviewees
4.3.2 Questionnaire format
4.4 Evaluation Methods
4.5 Evaluation of the Findings
4.5.1 Function of Money
4.5.2 Intrinsic aspects of cryptocurrencies
4.5.3 External forces
4.5.4 Future Outlook

5. Conclusion
5.1 Discussion
5.2 Critical Reflection

v. Bibliography

vi. Appendices

vii. ITM

i. Abstract

‘Money’ and ‘writing’ are one of mankind’s earliest inventions, being used as means of communication from the start and are fundamental to the social and central relationship between individuals and the state. Recent financial crises gradually dismantled this relationship and Bitcoin positioned itself as the forerunner of a new decentralized financial asset class. The term ‘Cryptocurrencies’ evolved as an imperfect form of memory, one which fits somewhere in between commodity money and fiat money, a synthetic commodity money. Regardless, of its technological and monetary benefits, cryptocurrency lack to attract larger parts of the German population. With the use of an active research approach, this research paper utilizes three different work cycles to identify the potential. Further insights from qualitative sources including an intensive literature review on the types and functionalities of money, case studies of potential consequences that private or state-owned cryptocurrencies have on the economy, and expert interviews will support to identify the macroeconomic and social barriers towards the acceptance of cryptocurrencies in the German economy. Cryptocurrencies characteristics follow Austrian economic principles which clash with the current fiat-money system. Broader adaption of cryptocurrencies would weaken the government's monetary policy tools, whereby the European Commission stands ready to take regulatory actions against such a scenario, but shows no further indications to implement a central bank digital currency of its own. The findings show that the intrinsic aspects of private cryptocurrencies, like Bitcoin, perceivably creates an unsecured, unfamiliar and unregulatable, even criminal, playfield for most of the German citizens. Whereas most cryptocurrencies provide a strong potential to act as a better medium of exchange, it’s deflationary characteristics of being limited in supply and un-controllable features make most cryptocurrencies a less valuable unit of account and store of value, due to high price fluctuations that are solely affected by the demand and perception of its users. Government regulations and negative sentiment of national media communicate Bitcoin as a risky financial asset and further falsely highlight its limited use to act as a currency. German citizens have a strong saving culture and high trust in the Euro and fore mostly neglect risky financial investments. A further lack of retailer acceptance of cryptocurrencies as a payment method has dispirited a potential network effect, which is a fundamental requirement for a successful adoption of new technology

iii. List of Figures

Figure 1: Active Research' Work Process 3

Figure 2: Blockchain technology flow 11

Figure 3: Functions of money overview 15

Figure 4: Three differenttypes of Virtual Currencies (VC) 17

Figure 5: Centralized & Decentralized functional models of user-to-administrator interaction.. 19

Figure 6: Example of a 'Hard Fork' 24

Figure 7: European average amount of cash in wallet 32

Figure 8: Bitcoin Inflations vs Time 35

Figure 9: Potential Modalities of a CBDC 36

Figure 10: Balance Sheet with Central Bank Digital Currency 38

Figure 11: Household Savings ratio 2009-2014 (in%) 46

Figure 12: Conceptual Model of Adoption 51

iv. List of Tables

Table 1: Monetary Aggregates 2016 23

Table 2: List of Interviewees 53

v. Abbreviations

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1.1 Initial Situation

“I think the internet is going to be one of the major forces for reducing the role of government.

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, the way in which I can take a twenty-dollar bill and hand it over to you and there is no record of where it came from and you may get that without knowing who I am.” - Milton Friedman (1999)

The Professor and Nobel Prize winner in economics, Milton Friedman was a true visionary and advocate for human freedom and economic theory. Not many people realized the value of the internet when it became public in the early 1990’s. It turned out to be a revolutionary commodity that changed how humans interact, communicate and transfer data. The internet has initially been invented as a cryptographic way of sending a message from one server to another and endorsed the globalization. It further advanced a flexible cross-border transfer of money with the rise of web-based third-party payment processors. The vast increase of households with access to the internet has amplified the opportunities to digitally transfer, invest or store wealth and foremost increased the global GDP growth (Manyika & Roxburgh, 2011).

Simultaneously, the third stage of the economic monetary union (EMU) was integrated in January 1999, the Euro has been accepted as a real currency and a single monetary policy was introduced under the authority of the European central bank (ECB). The abundance of the gold standard after the first world war, served as the basis of most European monetary systems, this lead to a system where the money supply is controlled by a central bank rather than a fixed amount of money (Law, 2016). While the centralized control of the ECB brings noticeable benefits such as lower costs of exchange and the elimination of competitive devaluations of national currencies (Ison & Wall, 2007), the subsequent financial crisis in 2008 moved Central Banks to slash interest rates and employ unconventional monetary policy tools to ward off deflationary pressures (Alcidi, Busse, & Gros, 2017). Citizens that have been affected by financial crises or high inflation but also libertarian-anarchists that generally debate the trustworthiness of its national finance and economic system, have utilized the parallel online P2P economy of cryptocurrencies as a ‘Safe Haven’.

Economists and the individuals affected lost trust in monetary policymakers and centralized financial systems.

Almost 10 years after Milton Friedman’s vision to use reliable e-cash as a catalyst to reduce the role of a centralized government and banking systems, the first white paper of a cryptographic currency was created; past literature states that it was the reaction to the financial crisis in 2008 (Moore & Christin, 2013). The creation of the Bitcoin Whitepaper in 2008 by the inventor known under the Japanese pseudonym ‘Satoshi Nakamoto’ has been the first step to completely revolutionize the ability to transfer wealth through the world-wide-web (Nakamoto, 2008). The technology behind the digital currency ‘Bitcoin’ is built on a Blockchain technology which allows a secure peer to peer (P2P) transactions without the interference of individual banks or third-party services to verify these. In other words, the blockchain technology behind cryptocurrencies such as Bitcoin cut away the middlemen by taking the role of ledger or bookkeeping with an algorithmic mathematical equation, thus freeing the people from centralization or centralized trust (Tumber, 2015).The invention of blockchain technology and cryptocurrencies started to challenge the status- quo of the profoundly established European monetary system. In the first whitepaper from 2008 Nakamoto argues that ‘the root problem with most conventual forms of money is the trust required to make them work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve... their massive overhead costs make micropayments impossible.’ (Nakamoto, 2008). Nakamoto and many other economists believe that this technology could potentially become an enormous paradigm shift in the way humans think about money and stored value.

1.2 Objective & Research Approach

The objective of this paper is to critically assess the barriers that cryptocurrencies face to become fully integrated within the German economy and to be illustrated as a rational alternative to fiat money. For such a paradigm shift to occur, a cryptocurrency perceptibly needs to outperform fiat money on the three functionalities of money: to serve as a medium of exchange, a unit of account and store of value but it also needs to fulfill the economic and social aspects of money to be seen as an alternative form of money.

Research Approach

With the use of an active research process, the researcher will utilize three different work cycles to identify insights and knowledge from various sources including a literature review, case studies, and expert interviews. Due to the complexity and unfamiliarity of the research topic, the dynamic and structural work-cycles that are included in action research process will enable reflection and preparation for the next work cycle (see Figure 1).

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Figure 1: Active Research' Work Process (figure inspired by Maklan, Knox, & Ryals, 2008)

First, to understand the positioning of cryptocurrencies to be integrated into the German economy, this paper will outlook the development of money and consider its functionalities in contrast to the characteristics of the most prominent private cryptocurrency, Bitcoin. Some further literature research will analyze the differences and similarities of the Euro to cryptocurrencies regarding money supply and monetary theory as most cryptocurrencies follow an Austrian economics approach which is quite contradicting to the current European monetary system. Secondly, use cases of the potential adoption of cryptocurrencies will further be analyzed, as cryptocurrencies can exist in different functional models. The research paper will analyze the impact and barriers, that a central bank digital currency and private cryptocurrencies can have on the German economy. Lastly, the attitudes and expectations of German stakeholders and cryptocurrency experts are investigated with qualitative expert interviews (further explained in 1.4 Methodology & Structure), to consolidate a general perception and possible future outlook of potential barriers that hinder cryptocurrencies of being fully integrated into the German economy.

1.3 Theoretical & Practical Relevance

Digital money that is constructed on cryptography has been investigated since the ‘cyberpunk’ movement in 1998 with projects and white papers such as ‘b-money’ from Weis Dais, ‘Bitgold’ from Nick Szabos and the ‘e-gold’ platform from Doug Jackson which is still operating as a digital payment platform (Vogel, 2016). Nevertheless, none of these projects have grasped heavy media awareness nor have any of these projects been stable enough to reach mass adoption. Since the introduction of cryptocurrencies in 2008 with the invention of Bitcoin, Citizens have found an actual use-case for these currencies. Whereas in the early days, it was used on the dark-net to trade illegal commodities, it progressively started to become respected in several legal mainstream industries. Many papers have written about the technological aspects of cryptocurrencies, including the protocol, privacy or network architecture of a cryptocurrency (Gervais, et. al, 2013; Jan & Leeuw, 2013; Koshy, P., et al. 2014). Relative to this paper, the economic aspects such as market equilibria, market intermediates or bitcoin’s status as a form of money have also been heavily researched and explained through various studies (Yermack, 2014; Dwyer, 2013; Franco, 2014). Nevertheless, little to no research exists, that comprehensively defines the factors that discourage the adoption of cryptocurrencies (Kristoufek, 2014, & Glaser, et al., 2014) or studies the aspects of bitcoin’s materiality, its “social life”, and perceptions of legitimacy among citizens and governments (Dodd, 2017; Karlstrom, 2014). Cryptocurrencies, like Bitcoin, that have been built on blockchain technology have similar, or even, improved characteristics as fiat currencies, including superior saleability, scarcity, durability, and portability, thereby facilitating exchange (Weber, 2014).

As stated in the initial situation, a paradigm shift of currency technology is bound to happen due to the general dissatisfaction and a long-time damaged confidence in the Banking systems which has become a strong catalyst towards this need for alternative and innovative concepts for future monetary systems. Additionally, the internet era has generated a requirement for low cost, anonymous and rapidly variable transactions to be used for online barter, and fast settling money has emerged, therefore. For the most part, e-money has fulfilled this role, but the last few years have seen new types of money emerge to enhance such a paradigm shift (Peters, Panayi, & Chapelle, 2015). A paradigm shift as such occurs if increased criticism evolves like doubting the correctness or the power of the current banking system for instance (Spinner, 2009). However, today, money is already invented. A new currency has to compete against an established monetary system (Weber, 2014). This situation can be described with Metcalf s law, that the benefits of using a network rise with the number of network participants; thus, cryptocurrencies can be conceived as a decentralized monetary network with relatively low users till date.

Consequently, the problem definition of this paper is to understand the slow growth and usage of cryptocurrency within today’s economy. A recent global study from the University of Cambridge identified that in Q1 of 2017 there have only been ± 3 million cryptocurrency users and 11.5 million digital wallets which store cryptocurrencies (Hileman & Rauchs, 2017). This would mean that only 0.04 % of the world population have actively used cryptocurrencies as either a store of value or medium of exchange. A representative study on 1,009 German citizens from Bitkom (2018 ) identified that 64% of the German population knew about Bitcoin in 2018, compared to 36% in 2016, and only 14% in 2013. Furthermore, 19% of the participants mentioned that they ‘can imagine using bitcoin in the future’ due to curiosity (53%), the unhappiness of the central bank’s monetary system (37%) or to use it for online payment (31%). Although only 4% of the entire study group owns it currently. The majority (72%) however mentioned that they have ‘no interest’ to use bitcoin any time soon, and so only 3 percent believe that digital cash belongs to the modern society. Furthermore, from a retailer perspective, the adoption of crypto payments is currently at 2% with substantial interest among European retailers to accept payments in future (De Nederlandsche Bank, 2018). While Bitcoin and other cryptocurrencies have been in existence since 2009 and certainly bring multiple advantages with it, the market penetration is still very low. This paper aims to identify the macroeconomic reasons behind the slow growth of usage and acceptance towards cryptocurrencies within the German economy.

1.4 Methodology & Structure

The blockchain technology and cryptocurrencies are still in its infant stages and believed to be an unfamiliar and new technology with a lack of scientific knowledge in the field of cryptocurrencies besides the technical aspects (Spenkelink, 2014). Thus, to gain more access to recent information, the paper utilizes a vast amount of secondary research in forms of a literature review and further political and economic analysis regarding cryptocurrencies from online sources including reputable news sites and journals. The researcher will build a scientific background on the gathered literature concerning the history of money, a basic background of distributed ledger technology including the types of cryptocurrencies that exist and how these could influence monetary regulations in future.

The research structure will be qualitative which puts the interpretative approach and subject- related understanding in the spotlight (Lamnek & Krell, 2016). In principle, the paper goes against a quantitative approach since an application of quantitative research methods needs sufficient research and hypothesis about the object of investigation to draft possible connections or a theoretical model (Robken & Wetzel, 2016). Since the research field on cryptocurrency lacks this depth of knowledge, a qualitative approach is required to respond flexibly to unpredictable, yet unknown aspects (emergent flexibility) to identify potential barriers to mass adoption. Thus, qualitative methods, like the personal expert interviews, are explorative and generate hypothesis which indicates that the theory formation takes place gradually while conducting primary research and will be further developed during the investigation (Winter, 2000). Nevertheless, qualitative research approaches are criticised to lack objectivity and that the interpretation of the results are barely controllable, nor representable and lack theory (Robken & Wetzel, 2016). These factors must be kept in mind by the researcher while conducting the research to minimize the risk of subjectivity and non-representative results (see subchapter 4.2.2 Research Quality).

For the empirical part of the paper, the researcher will conduct expert interviews, which is a form of guided interviews. The unique aspect of such interviews is the target group to be interviewed. The experts as a ‘whole person’ are not the center of the research interest but they are rather considered as representatives for the action and views of a particular group of experts (Heistinger, 2006). The guided interviews must be strongly structured and controlled, furthermore, the researcher must be well-informed on the topic and ask specific questions.

2. History of Money

‘Money’ and ‘writing’ are one of mankind’s earliest inventions, being used as means of communication from the start and are fundamental to the social and central relationship between individuals and the state (Orrell & Chlupaty, 2016). Looking at the evolution of money and how each paradigm shift has brought new benefits to the usage of money will outline and indicate if cryptocurrencies can theoretically be integrated into this monetary evolution. This subchapter is a basic overview of the evolution of money and transfer of wealth.

Barter Economy

Before the integration of physical money, humans traded their goods and commodities between one another. In the past, not everyone within a community was able to hunt, farm livestock or pick (exotic) fruits and vegetables as good as the other, our ancestors decided to specialize in their most suitable field and trade the collected goods and services. Nevertheless, suitable exchange goods were not always available for both exchanging partners and there were also discrepancies regarding the value of the exchanged goods offered. Thus useful, transportable and imperishable goods have crystalized themselves to be the preferred medium of exchange, such as arrowheads, salt, and shells (Wohlschlagl-Aschberger, 2015).

Coins & Currency

Slowly people realized that the items themselves did need to be valuable if people agreed that the traded shells, salt or feathers could be used as money. However, those mediums of exchange were not very robust and easily damaged, hence metal coins were the rational invention as a store of value. Coins were durable, difficult to counterfeit and hold intrinsic value but on the contrary also very heavy. In 640 B.C. the King of Lydia made the first standard coin, they were stamped with a lion’s image and each coin had a set value, thus people did not have to weigh other commodities like silver bars to decide their value. The advent of these coins which were created by a mixture of gold and silver let to the setting up of an open market (Kaul, 2013).

Paper Money

The first known ‘paper money’ originates from China where rich citizens with a lot of metal coins found that their strings of coins were too heavy to carry around. Thus, coins were left with a trusted person and the merchant handed out a slip of paper that recorded how much coins or money this person has. Eventually, from this note, the paper money “jiaozi’ originated but it did not fully replace the usage of coins as money. Only 360 years later in the 960’s the Yuan Dynasty used paper currency as a predominant circulating medium, issuing paper money or notes that promised to be redeemed later for some object of value. Paper or fiat money had different routes into Europe, some more successful than others. The first proper European banknotes were issued by a predecessor of the Bank of Sweden called “Stockholms Banco” in 1660 but bankrupted only a few years later after rapidly increasing the artificial money supply through the large-scale printing of paper money, thus Sweden eventually returned to a pure silver standard. Before the end of the seventeenth century, banknotes were also printed and issued by goldsmiths in England. People would deposit gold with goldsmiths for safekeeping and in return receive a receipt (Connolly, 2006; Allen, 2009). Paper money, issued by third parties, initiated the rise of modern banking since traditional banking functionalities such as deposits, moneylending, and transferring funds was combined with the issuance of bank debt, serving as a substitute of gold and silver. The evolution of central banks has been implemented in most nations in the 18th and 19th centuries, after severe currency crisis and wars, to regulate the value of national currencies, finance the government and as a sole authorized distributor of banknotes (Capie, F. et al., 1994). While one is most commonly accustomed to thinking about money in its physical form, only a very small fraction of a country's total money supply is typically in the form of notes and coins (Peters, Panayi, & Chapelle, 2015).

Electronic Money

Halpin and Moore (2009) defined E-Money as electronically (including magnetically) stored monetary value, represented by a claim on the issuer, which is issued on receipt of funds to make payment transactions, and which is accepted by a person other than the electronic money issuer. Types of e-money include prepaid cards and electronic prepaid accounts for online usage. Additionally, there is ‘network money’, which refers to a software that allows the transfer of value on computer networks, particularly on the Internet (Berentsen, 2005). This process is always linked with third-party such as banks or special electronic money institution such as ‘Visa’ to act as a consensus and verify such transactions.

The integration process of e-money is not linear and uniform. The paradigm shift and integration of such a new payment method are influenced by various factors such as the countries development, openness to global market but also the general capability of acceptance of technological challenges and the nations educational level (Popovska-Kamnar, 2014). In the early 21st century, the ECB believed that the e-money development is still at an early stage but increased rapidly since, as seen in figure 1 showing the yearly increase of cashless transactions (in billions) within Europe. E-Money currently accounts for the highest frequency and volume of transactions in comparison to any other form of money.

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Figure 2: Number of cashless transactions in the Eurozone (2000-2011) (European Central Bank, 2012)

The ECB further states that the development and use of common standards for e-payment markets should be driven by market participants and bodies of the banking industries such as the European Committee of Banking Standards (ECBS) and the European Payments Council (EPC). Furthermore, the ECB is continuously working on the security of e-payment transactions (European Central Bank, 2002). Hence, the governing authority is accountable for the overall functioning of the scheme enabling the use of e-money and to ensure that all the actors involved comply with the scheme's rules. It is also responsible for ensuring compliance with the applicable oversight standards (European Central Bank, 2009).

E-money brings benefits such as faster, cheaper and simplified transactions but also transparency against money laundering, however, it possesses a challenge to central bank’s monetary policy regarding the Post Keynesian monetary theory. The challenge to control interest rate stems from the possibility that e-money may diminish the financial system’s demand for central bank liabilities, rendering central banks unable to conduct meaningful open market operations. Increased financial instability could emerge from the increased elasticity of private money production, and from periodic runs out of e-money into central bank money that generates liquidity crises (Palley, 2001). On the contrary, the ECB is of the opinion that as long as there is a demand for central bank money and as long as the central bank has the position of a monopoly supplier, it will be possible for it to control a money market interest rate (European Central Bank, 1998). The ECB has further been stated to be enhancing a cashless society, stating that e-money has brought up the argument of a digital central bank and the obliteration of paper money within the monetary system (European Central Bank, 2012). This would allow central banks to enforce negative interest rates as a form of expansionary monetary policy. While strong negative interest rates may produce positive macroeconomic results, the ECB has sufficiently controlled the crisis of the last decades with other unconventionally measures. Whereas electronic money allows central banks to implement more efficient monetary instruments, it has shown some flaws in its capabilities to fulfill all characteristics of money. For electronic money to act as a valuable currency, it must not be possible to spend digital currency more than once yet, if the digital currency is like paper currency in this respect, there is no institution checking to make sure the transfer of purchasing power reflects available funds. Deposits in banks are represented on banks’ computers by bits but the bank certifies that funds are available for the transfer. No person or institution necessarily stands behind the transfer of digital currency unless one is introduced by design. For physical currency, the issuer creates value in part by making it difficult to reproduce the currency. For digital currency, reproduction could not be easier (Dwyer, 2013).


Bitcoin as a meta-currency is seen as the next evolution of money, in a world where instead of banking fees, credit card fees, and carrying cash, everything is done in bitcoin, which is far more divisible, easier to count, easier to carry, impossible to duplicate, and more convenient for a globalized economy regarding a double coincidence of wants for national currency (LeBlanc, 2016). Money must be widely accepted to be considered as useful. Metcalfe’s law plays a huge part in the integration of new forms of money into society. All forms of money such as coins, paper money, or electronic money have taken decades to be widely accepted as a payment method. The profound idea behind cryptocurrencies is to globally provide a fast way to transfer funds at a transaction cost which is kept minimally low. Furthermore, the blockchain gives the user a certain amount of privacy, thus the sender and receiver of the transaction stay pseudo-anonymous, but all transactions and e-wallet addresses on the blockchain are publicly visible. One of the most crucial elements of this technology is the independence and redundancy of third-party providers that generally act as a consensus (Spenkelink, 2014). A basic visualization of how a transaction gets verified over a decentralized network on the blockchain is shown in Figure 2 below:

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Figure 2: Blockchain technology (Kulkarni, 2017)

Whereas virtual money being sent on a decentralized system would have previously caused theft, counterfeiting or disagreements in form of ‘double spending’, Satoshi Nakamoto came up with the idea of using a chain of digital signatures to sign every transaction and allow users to verify the transactions by verifying the signatures. However, since there is no central authority in the system, the only way to verify that a coin has been spent only once is to be aware of all transactions. To accomplish this, all transactions are publicly announced and chained together in a “blockchain”. Therefore, if one is certain that a blockchain is correct, due to the chaining of the transactions all the transactions are thought to be correct (Nakamoto, 2008). The European Central Bank has investigated the disruptive blockchain technology since 2012 and formulated cryptocurrency as unregulated digital money being issued and controlled by its developers. These developers, also known as ‘miners’ use computer power to solve mathematical equations also known as ‘proof-of- work’ to create new coins and verify transactions in a block of data, known as the blockchain (European Central Bank, 2009). This makes it impossible to any sort of cyber-attack since an attacker cannot simply change one transaction in a block, he would have to change the entire blockchain since the year 2008 (Spenkelink, 2014). This process of ‘mining’ new currencies becomes more difficult and costly over time due to the algorithm, causing a hardcoded upper limit of new amounts of currencies that can be created. This makes the supply perfectly inelastic, the supply limit for bitcoins is at 21 million ‘coins’. This inelasticity of supply is viewed as an advantage by some economists and a disadvantage by others. It is worth noting that an inelastic supply is roughly in line with Friedman’s solution for the optimal quantity of money, also known as the Friedman rule (Friedman, 1969), which implies that the optimal long-run monetary policy is one in which nominal interest rates are zero.

2.1 The types & functions of Money

The way current monetary and payment systems work throughout the world varies widely. The added value for monetary systems and cryptocurrencies therefore also hugely differs per geographical area. To be able to give comparable and concise assessment this research is scoped towards looking at the monetary system of the European market, particularly the German market. Money is three things - and none of these are ‘real’. Money is a ‘store of value’, which means people can save it and use it later, making purchases over time. It is a ‘unit of account’, that is, it provides a common base for prices. And it is a ‘medium of exchange’, something that people can use to buy and sell from one another (Law, 2016).

Commodity money vs fiat money

The history of money gives a concise indication of commodity money slowly evolving into fiat money. Commodity money has intrinsic value and makes use of some commodity such as shells, rice or gold. It is important to mention the gold standard and the Bretton Woods regime, that the United States government committed itself to sell gold for 35 dollars per ounce, and as a result, other nations decided to value their national currency against the US dollar. However, on August 1971, the federal president Richard Nixon announced a new economic policy to aggressively control the nation’s high unemployment and relatively low inflation by no longer supporting the dollar's value with the gold standard. The Nixon shock caused fiat money to have no intrinsic value and could therefore not be converted into a commodity at an official rate. However, governments gave themselves a monopoly on the right to issue fiat money, keeping supply limited (Allen, 2009).

2.1.1 Medium of Exchange

For most, the primary function of money is to use it as an exchange of goods and services, which conceivably made the paradigm shift easier from barter trade to using transportable, scarce and imperishable goods such as coins or paper money. Money removes the problem of double coincidence of wants and serves a general purchase power which is globally accepted. Money, particularly electronic money, has enabled time-effective exchange and profoundly increased the volume of transactions (Tucker, 2010). In general, money must have the following 9 characteristics to serve as the optimal medium of exchange:

- Value common assets
- Constant utility
- Low cost of preservation
- Transportability
- Divisibility
- High market value in relation to volume and weight
- Recognizability
- Resistance to counterfeiting
Ametrano (2014) adds to this:
- Fungibility

Fiat money has proven many years to fulfill most characteristics. Where paper money has come under a lot of pressure to being counterfeited and highly inflationary in some countries.

A medium of exchange, or ‘legal tender’, are instruments of payment that the law requires a creditor to accept as a payment from a debtor according to the Banking Act. According to the Bundesbank, Cryptocurrencies are not considered as electronic money since they do not represent a claim on any issuer. As such, a Bitcoin miner does not ‘issue’ cryptocurrency, thus, there is no claim on the miner to pay the value of the cryptocurrency, nor is there any promised link to a cryptocurrency unit (Hoegner, 2015).

2.1.2 Unit of Account

Without a unit of account, governments would not be able to measure tax revenues or record expenditures. A unit of account already aided in the barter economy to identify the worth of a product compared to another, for instance, a farmer knew that 2 bushels of wheat were worth 1 pair of shoes. Nowadays, the prices of goods and other economic transactions are all noted in (fiat) money and not any other goods or commodities. Currencies such as the American dollar or Japanese Yen act as the denominator to provide a common measurement of the relative value of goods and services. Most importantly however, for money to function as a good unit of account, it is necessary that the prices are stable as otherwise, it is not suitable for its yardstick function (Hayek F. A., 1978). BaFin, the finance regulatory entity in Germany, defines cryptocurrency as neither money nor electronic money but as a unit of account, and therefore as a financial instrument under section 1(11) no. 7 of the Banking Act (Hoegner, 2015). Despite that cryptocurrencies are not seen as legal tender, most can be comparable to foreign currencies as they contain value and serve as a means of payment.

2.1.3 Store ofValue

In principle, exchangeable items need to be able to store its value over a certain amount of time and not depreciate. Barter items are not a good store of value since they are mostly perishable goods and cannot be stored for longer periods of time (Spenkelink, 2014). Popular modern stores of value include properties or art such as paintings, but money has always been a store of value with high liquidity. Nevertheless, times of monetary changes causing high inflation or low-interest rates from banks has led citizens to store their wealth in more intrinsic stores of value like properties or gold reserves. Cryptocurrencies can be stored very well and do not perish due to their digital nature, nevertheless, cryptocurrencies suffer high fluctuations and are only a suboptimal solution to store value.

The above comparison of cryptocurrencies characteristics to act as money in contrast to gold and fiat currency highlights that cryptocurrencies can become a rational alternative to substitute other monetary assets in the future in at least one of the three functionalities of money.

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Figure 3: Functions of money overview (Ametrano, 2014)

Ametrano’s chart is clearly contradicting the German finance regulatory entity “BaFin” which defines cryptocurrency as neither money nor electronic money but as a unit of account, whereas Ametrano categorized cryptocurrency as being highly valuable to become a medium of exchange and less useful to be a unit of account. Mankiw (2015) adds ‘liquidity’ as another function of money, being the ease with which an asset can be converted into a medium of exchange. Whereas gold is very inflexible to be used for day to day transactions, fiat currencies have a much higher liquidity at a local scale. This is where cryptocurrencies bring a higher value than any other financial asset, it can be interchanged globally within seconds.

It is fair to say that all cryptocurrencies with a high market capitalization do not yet fully satisfy all characteristics of money due to the novelty of the blockchain technology. However, the head of the International Monetary Fund stated that many of these are technological challenges that could be addressed over time (Lagarde, 2017). Nevertheless, it is clear to mention, that the most prominent cryptocurrency, Bitcoin, is still far too volatile to act as a better functionality of money due to its high opportunity cost. Most cryptocurrencies suffer from high price fluctuations due to a small unregulated market since blockchain technology is in the ‘early adoption face’ according to Gartner’s Hypecycle (Bashir, 2017) and thus only engaging a small community of the global population. Mortimer-Lee (2017) believes that Bitcoins high price volatility and ‘bubble-like’ price swings are a manifestation of asset overvaluation because of global QE and negative interest rates, questioning the longer-term value of fiat currencies.

2.2. Cryptocurrency: A paradigm shift

Due to the world-wide novelty of the blockchain technology and cryptocurrencies, there has only been little academic interest, starting with the earliest articles from 2011. Due to this scenario, there is still no author that provides a well-cited definition of what constitutes a cryptocurrency (Spenkelink, 2014), thus definitions still vary widely.

According to BaFin, virtual or cryptographic currencies are only based on the idea of a substitute currency (BaFin, 2017). Hence, they are not issued by the state and limited in supply due to the creation of blockchain driven cryptocurrencies in strict accordance with a fixed mathematical protocol within a computer network called ‘mining’. This process is contradicting central banks’ power over the money supply, by having the ability to print unlimited amounts of money or commercial banks creating deposit money, a process commonly known as fractional reserve banking. One crucial factor makes the blockchain technology revolutionary is the process of creating and transferring money digitally. As indigitated in the subchapter 2. History of Money and further analysis (Nolting & Muller, 2017), shows that every historical currency was reliant on the support of a central authority which guarantees its value, thus delivering securities to its investors. Blockchain technology and cryptocurrencies make the ‘middle-man’ business model obsolete, making it harder to cheat in transactions, thus reducing the value of credibility lent by trusted intermediaries. Nevertheless, the standard of how humans store and exchange currencies through a trusted third party has existed since the creation of currencies. Consequently, for cryptocurrencies to achieve mass-adoption, regulatory procedures and trust in the value of such currencies are most likely necessary, which, however, goes against the concept of popular cryptocurrencies such as bitcoin that work on a decentralized and unregulated blockchain network.

2.3 Types of Cryptocurrencies

Cryptocurrency can be divided into two groups, convertible and non-convertible virtual currency (Hoegner, 2015). A convertible cryptocurrency has equivalent values as fiat money and can be exchanged for fiat currency and vice versa through certain exchanges or ATM machines. On the other hand, a non-convertible virtual currency is specified to a certain virtual domain, mostly in form of video games such as World of Warcraft. Players use electronic cash to buy World of Warcraft Gold which can then be used to buy certain products or services within the game including weapons, gear, etc. A similar principle exists for company-specific loyalty points that can be exchanged for both online and offline goods and services. Both types of (in-game) virtual currencies, however, cannot be converted back into fiat money. The European Central bank put virtual currencies in three pillars as shown below:

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Figure 4: Three different types of Virtual Currencies (VC) (European Central Bank, 2012)

The effects of each type of virtual currency on the economy and national currency will be analyzed in the subchapters below. Nevertheless, the focus of this research paper lays on type 3 virtual currencies which have highest similarities to traditional fiat money, both physical and digital and can be exchanged from virtual currency into real economy money and vice versa.

2.3.1 Type 1: ClosedVirtual Currency Schemes

Closed virtual currency schemes are popular in the gaming industry where virtual worlds or communities exist. This sort of virtual or ‘in-world’ money is locked in a closed economy and is used as a unit of account to measure ‘in world’- consumption, production, investment, services or even virtual government spending (Guo & Chow, 2008). Regardless of the currency being a great unit of account, it is ‘non-transferable’ into any other virtual or real-world economy, thus no exchanges or purchases outside this virtual community is possible and strictly forbidden (Dibbel, 2006). However, such currencies have proven to successfully feature as a central authority, comparable to a central bank, by regulating the money supply to control inflation or to promote economic growth (Peters, Panayi, & Chapelle, 2015).

2.3.2 Type 2: Virtual Currency Schemes With Unidirectional Flow

The second type of Virtual Currency Schemes has been the first step to streamline online retail and gain customer loyalty. These virtual currencies are purchased with ‘real money’ at a specific exchange rate but cannot be traded or exchanged back. These virtual currencies are used in various industries including Facebook credits, Amazon Coins, Nintendo Points or frequent flyer points from airlines to purchase offline or online (‘in-game’) goods and services (Hartmann, 2015). Such virtual currencies are widely adopted to the German economy due to its centralized nature and trust that is created by large corporate companies, despite such coins having no intrinsic value either.

2.3.3 Type 3: Virtual Currency Schemes With Bidirectional Flow

Type 3 virtual currencies including prominent currencies such as Bitcoin, Ethereum and Litecoin have the closest connection to ‘real money’ and the economy as such and thus are the core focus of this research paper. These virtual or cryptocurrencies are comparable with any other real currency, in relation to the exchange rate, and can be used for purchases online and offline (European Central Bank, 2012). To define the type 3 virtual currencies and illustrate how it differentiates from other types of virtual currencies and hence, becoming highly relevant as a ‘real currency’ in the global economy, Spenkelink (2014) has profoundly summarized the characteristics of cryptocurrency into four key characteristics, according to past expert literature

(Ametrano, 2014; Wiatr, 2014; Ahamad, 2013). A blockchain based cryptocurrency must have four key components:

- a centralized/decentralized network
- Peer-to-peer
- Uses the internet network
- Uses public-key cryptography

Cryptocurrencies can have one of the two functional models of how users and administrators interact, as visualized in Figure 5 below:

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Figure 5: Centralized & Decentralized functional models of user-to-administrator interaction (Hartmann, 2015)

The blockchain network being either centralized or decentralized will have a huge influence on the regulatory framework and ease of acceptance of such currencies for central banks and governments. This will further be looked at in subchapter 3. Monetary policy’s cryptocurrency challenge.

A report from the Deutsche Bank assesses cryptocurrencies as digital money with artificial limitation, without coins and notes. The report (Muller, 2017) further states, the blockchain, that runs of cryptography and a collective booking system, lets cryptocurrencies build a distributed, safe and decentralized payment system, without the necessity of banks, intermediates, an organization or a central technical infrastructure to work. Additionally, the transfer of such currencies is directly made between the two individuals and can come in forms of B2B, B2C or C2C, with the relevant cryptocurrencies such as Bitcoin, Ethereum, Ripple, Litecoin or IOTA. In a sense they are scarce commodities as the number of available currency units is in this case limited by mathematical algorithms. After every digital currency unit is issued there is no way to generate additional currency units from it (e.g. Bitcoin is limited to 21 million units). Furthermore, every cryptocurrency has their own currency generating process (Muller, 2017) but also differ in how they validate transactions, calculate and process data or additional non-payment functions (Hartmann, 2015). The differences that have been identified from Muller and Hartmann’s ECB report are outlined below:

- Validating systems (proof of work - proof of stake)
- Algorithms (mathematical procedure for calculating and processing data)
- Supply of coins (distribution/distribution/number of units at the creation and over time)
- Additional, non-payment functions

For instance, Bitcoin can be described as a decentralized ledger of transactions. The role of the verifying third party found in centralized systems is played by the Bitcoin network participants, who contribute computational power and are rewarded in the form of new amounts of cryptocurrency (Peters, Panayi, & Chapelle, 2015), this validating system is known as proof of work. Despite the recent heavy criticism on cryptocurrencies, Japan has been the first country that passed the Cryptocurrency Act and accepted Bitcoin as legal tender followed by strong support from Japanese retailers to accept Bitcoin and several other convertible cryptocurrencies as a method of payment (Mortimer-Lee, 2017). The global adoption of the most prominent cryptocurrency, Bitcoin, shows a pattern of its usage in different economies. Whereas for developed countries like Japan, Australia, Singapore or Luxemburg, cryptocurrencies are used for financial purposes, less economically stable or developed countries such as Ghana, China, and Nigeria, use digital currencies - besides illegal transactions - to escape political injustices coming from centralized and authoritarian regimes.

3. Monetary policy’s cryptocurrency challenge

Since the demand for money cannot be controlled, the only way to ensure price stability is to manage its supply. The regulation of the supply of money is the monetary policy core (Ametrano, 2014). Such policies are employed to alter economic growth through monetary policy instruments, executed by economists and central bankers. These policies adjust the size of the money supply, price levels, and benchmark interest rates to further affect the economies wage growth, taxation and unemployment levels but also the inflation of its national currency (Peters, Panayi, & Chapelle, 2015). State institutions have built restriction on how money is introduced into a system, how much of a currency can be owned and how it can be converted into other currencies. Central Banks like the European Central banks are necessary to supervise the currency schemes and enforce restrictions and regulations (Karlstrom, 2014). From a macroeconomic perspective, the Euro system uses three monetary policy instruments to influence the liquidity position of the banking sector to maintain price stability (De Nederlandsche Bank, 2018). These instruments are the minimum reserve requirement, open-market operations and standing facilities, which indirectly affect the supply and circulation of money within the European economy.

Even though the European Union only stands for a small share of global cryptocurrency trading, a round-table discussion within the European Commission has decided to further investigate into the implications of crypto-currencies for financial markets and the risks & opportunities associated within their use in the European Union (European Commission, 2018). Since the underlying blockchain technology of most cryptocurrencies is decentralized and thus, not backed by any local government or private organization but being circulated in the real economy on an increasing scale; central banks and governments could potentially be challenged by the decentralized nature of such technology. The circulation of cryptocurrencies is largely beyond the reach of direct regulation, monetary policy, oversight and money supply that has traditionally been enforced and controlled with localized private money, including e-money (Peters, Panayi, & Chapelle, 2015). Since virtual currencies are comparable to payment systems and have a high potential to develop wider acceptance in the future, the Euro system will continue to monitor payments-related developments in virtual currencies (Hartmann, 2015). Furthermore, the EU stands ready to take action based on an assessment of risks and opportunities (European Commission, 2018) and to identify how this new technology could impact or interfere with current monetary policies of the ECB. According to the IMF managing director, Christine Lagarde, the adoption of cryptocurrencies can put a question mark on the fractional reserve banking model that is known today (Lagarde, 2017).

Before identifying the barriers to the adoption and public acceptance of cryptocurrencies it is important to understand the impact CC can have on central banks and its monetary instruments. Since the central bank’s main purpose is to regulate the money supply, it is necessary to analyze to what extent cryptocurrencies can affect the monetary aggregate of a nation. Furthermore, an analysis of the ECB’s ‘fractional reserve banking’ as a modern but heavily debated expansionary monetary instrument has activated the debate to return to a ‘sound money’ scheme as proposed by the Austrian school of economics (Ametrano, 2014). For this instance, Bitcoin and other currencies are set to become a better form of money, due to its cryptographic, decentralized and portable characteristics.

3.1 The impact on the European Monetary System & Money Supply

The monetary policy framework of the Euro system comprises the general rules of the monetary policy instruments and procedures since the integration of the European monetary union and the Euro as a currency (Deutsche Bundesbank, 2018). These are used to implement decisions made by the Governing Council of the ECB on monetary policy in the euro area. The Deutsche Bundesbank is responsible for implementing Euro system monetary policies with German counterparties. The euro system utilizes a set of monetary policy instruments within its monetary policy frame working including open market operations, standing facilities or minimum reserves on accounts that credit institutions are required to hold (Deutsche Bundesbank, 2018). The ECB utilizes such expansionary monetary instruments accordingly to ensure that the inflation rate continues along this path,just below, but close to 2% over the medium term (Draghi, 2017). The German central bank (Deutsche Bundesbank, 2018) states that “a stable currency is the foundation of a healthy economy. It protects savers and income earners from the erosion of wealth while promoting growth and employment”.

Monetary policies are implemented to regulate economic growth and to manage a slight inflationary currency, executed by the ECB with modern monetary policies to control the money supply and circulation. Whereas Cryptocurrencies have no direct influence on the market operations, the usage growth of cryptocurrencies could lower the demand for traditional central- bank-issued cash and reserves, causing seignorage revenues to fall. Whereas Woodford (2000) and Lahdenpera (2001) state that central banks will always be in a position to set the desired policy rate even without central bank money, Niepelt (2016 ) argues that with an increase in CC usage, monetary authority may not only lose control over the money supply and credit but also the ability to provide lender-of-last-resort support. There would be neither a lender of last resort to provide emergency liquidity to the system, nor a centralized oversight and regulatory body. This lack of any centralized system of assurance would likely make any deposit-taking institutions, arising out of cryptocurrencies, of higher risk (Robinson & Willenberg, 2017). The chairman of the UBS (Papadopoullos, 2015), neglects such statement, arguing that cryptocurrencies could indeed provide instant liquidity in form of a ‘hard fork’ and can therefore positively impact GDP growth.

The impact of cryptocurrencies on the European economy will be highlighted, in the following subchapters, with concrete examples of how mass adoption of cryptocurrency usage can alter monetary aggregate and burden central banks interference on the money supply, in form of modern fractional reserve banking as a popular monetary tool.

3.1.1 Monetary Aggregate

The money supply, also known as the monetary aggregate’, is the quantity of money that is available in a national economy at a specific time (Mankiw, 2015). The population within modern societies can deposit their financial assets in form of saving deposits, fund or shares within their commercial banks and other financial services. To calculate the different types of assets within the economies money supply, they have been split in various monetary aggregates named as MO, MB, Ml, M2, M3 or MZM, whereas MO, M3, and MZM are rarely used nor calculated by most national banks (Dobeck & Elliot, 2006).

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Table 1: Monetary Aggregates 2016 (ECB, 2016)

The monetary aggregates differentiate in the level of liquidity or moneyness of the assets. Below is a table of the euro area monetary aggregate split into narrow aggregate (Ml), intermediate aggregate (M2) and broader aggregate (M3).

It is important to take notice that most money in the modern economy is not available in the form of coins and notes, but as deposits and loans created by commercial banks with modern policy tools such as fractional reserve banking; the privilege of creating deposits and loans is regulated by central banks (Ametrano, 2014).Whereas virtual currencies are not full forms of money, but alternatives to money that can substitute banknotes and coins, scriptural money, and e-money in certain payment situations (European Commission, 2018), these virtual currencies act as a narrow aggregate (Ml) and have the potential to influence the money supply. As cryptocurrencies only have a minor impact on money supply, the European central bank and German Bundesbank have started to ‘watch’ and consider regulatory actions on cryptocurrencies if the adoption of using virtual currencies increases. If more renowned retailers, such as Microsoft, start accepting Bitcoin and other cryptocurrencies, and consequently, the acceptance of cryptocurrencies for commercial transactions increases, there will be a new money supply since no conversion to local currencies is required. In practical terms, demand for goods will rise due to the increased money supply in the form of cryptocurrencies (Harris, 2017). Despite cryptocurrencies deflationary characteristics of having a limited amount, a software update known as ‘hard fork’ enables certain cryptocurrency to ‘split’ into 2 versions, thus creating additional money. A hard fork is a permanent divergence from the previous version of the blockchain, and nodes running previous versions will no longer be accepted by the newest version.

For instance, Bitcoin has been split into ‘Bitcoin Cash’ to increase the block size (from 1 MB to 8 MB) and thus allow more data of transactions in each block.

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Figure 6: Example of a 'Hard Fork' (Narayanan, et al. 2016)

A person who owned Bitcoin during the hard fork has additionally received 1 Bitcoin Cash coin. In the real economy, this process of creating money is known as helicopter money.

Helicopter Money

The phrase ‘helicopter money’ is a parable of dropping money from a helicopter, illustrating the effects of a monetary expansion, first coined by Milton Friedman in ‘The Optimum Quantity of Money’ (1969). Recent history has indicated that using ‘helicopter money’ is a powerful fiscal policy to prevent deflation, as suggested by Ben Bernanke, the Federal Reserve Board governor; despite economists calling such monetary expansion as an insurance against failed fiscal policies. ‘Helicopter money’ is applied through central banks, that alter the monetary base by supplying the government with new money without increasing assets on their balance sheet, which subsequently utilize modern possibilities such as granting universal tax rebate to all households.Whereas such extreme form of monetary easing has not yet been applied by the ECB, fiscal policies as such have been implemented in Australia in 2009 to fight ‘deflation’ (Leigh, 2012). Deflation is the continued decline in prices of a broad range of goods & services, which decreases investments and causes economic shrinking (Kuroda, 2016).

Economically developed countries like Australia and Japan, both suffered from deflationary pressure since the early 1990’s asset bubble, but have unsuccesfully exploited monetary policies such as quantitative and qualitative easing (QQE) and negative interest rates (Kuroda, 2016). Thus, utilizing both monetary and fiscal policies to cut tax and bigger budget deficits have been implemented as a last resort to fight deflation. Both countries have been at the forefront to adopt cryptocurrencies, whilst Japan has marked a 0,3% rise in GDP due to cryptocurrencies, according to analysts Yoshiyuki Suimon and Kazuki Miyamoto (Edwards, 2018). Bitcoins rise in 2017 has triggered a ‘wealth effect’ in Japan, which is a measurable increase in economic activity that occurs when asset prices rise, making consumers feel richer, and boosts their spending. Despite the negative sentiment towards private digital currencies incapability to act as a lender of last resort, as expressed from the chairman of UBS (Papadopoullos, 2015), Bitcoin can provide liquidity in form of a hard fork and can positively impact GDP growth, even during financially unstable environments. In theory, Cryptocurrencies, like central banks, are capable of ‘printing’ new money.

Whereas cryptocurrencies can theoretically act as helicopter money and influence a nations monetary aggregate, widespread adoption and higher financial volume of cryptocurrencies could, in future, impact monetary policies and act as a tool to halt deflationary pressure. The deflationary & comparative characteristics of most cryptocurrencies have the potential to affect the money supply of the Euro area, which provenly impacts economic growth and alters the purchasing power of the governing national currency, acting as a deflationary competitive currency. However, cryptocurrencies only have a fractional influence on monetary policies. Whilst Bitcoin has further acted as a catalyst for illegal tax fraud, the increase of additional state regulations, including the Know-Your-Customer (KYC) act, will tremendously decrease illegal activities such as tax fraud, money laundering or terrorist financing (European Commission, 2016). Besides, the ECB could potentially implement its own cryptographic currency, which has already been realized in several nations, known as a central bank issued digital currency (CBDC) (Barrdear & Kumhof, 2016; Boel, 2016).The characteristics of a CBDC high transparency would make tax fraud and anti­money laundering (AML) obsolete. However, a CBDC would also impact minimum reserve requirements, which is a modern and impactful monetary instrument used by the ECB. Therefore, it is important to briefly analyze the process of fractional reserve banking and its interference with currencies run on blockchain technology. How a CBDC could impact such monetary instrument, will then be further analyzed in subchapter 4.1 Monetary Theory and Potential Use Cases of Cryptocurrencies.

3.1.2 Fractional Reserve Banking

German Credit institutions are required by the European Central Bank (ECB) to hold a compulsory deposit on accounts with the German national bank (Bundesbank), called ‘minimum’ or ‘required’ reserves. The amount of required reserves to be held by each institution is determined by its reserve base, this reserve ratio was set at 2% at the start of Stage Three of the European Economic and Monetary Union (EMU) and was lowered to 1% since 18 January 2012 (Deutsche Bundesbank, 2018). Fractional reserve banking enables banks to only hold a fraction of deposits as reserves whilst lending out the rest of the deposit to profit from interest rates. The main functions of the minimum reserve system are to stabilize money market interest rates and to enlarge the structural liquidity shortage of the banking system (European Central Bank, 1998).


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What are the barriers to the acceptance of cryptocurrencies in the German economy?
University of applied sciences, Munich
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cryptocurrencies kryptowährungen bitcoin btc economics barriers german economy
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Anonymous, 2018, What are the barriers to the acceptance of cryptocurrencies in the German economy?, Munich, GRIN Verlag, https://www.grin.com/document/458035


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