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.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Initial Situation
- Objective & Research Approach
- Theoretical & Practical Relevance
- Methodology & Structure
- History of Money
- The types & functions of Money
- Medium of Exchange
- Unit of Account
- Store of Value
- Cryptocurrency: A paradigm shift
- Types of Cryptocurrencies
- Type 1: Closed Virtual Currency Schemes
- Type 2: Virtual Currency Schemes With Unidirectional Flow
- Type 3: Virtual Currency Schemes With Bidirectional Flow
- Monetary policy's cryptocurrency challenge
- The impact on the European Monetary System & Money Supply
- Monetary Aggregate
- Fractional Reserve Banking
- Distributed ledger money and Austrian policy objectives
- Empirical Part
- Monetary Theory and Potential Use Cases of Cryptocurrencies
- Central Bank Issued Digital Currency (CBDC)
- Private Cryptocurrencies as an Alternative Currency
- Research Design and Process
- Theory Models of Adopting Cryptocurrencies
- Research Quality
- Research Method and Data Collection
- Selection of Interviewees
- Questionnaire format
- Evaluation Methods
- Evaluation of the Findings
- Function of Money
- Intrinsic aspects of cryptocurrencies
- External forces
- Future Outlook
- Conclusion
- Discussion
- Critical Reflection
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This research paper aims to identify the barriers to the acceptance of cryptocurrencies in the German economy. It investigates the potential of cryptocurrencies as an alternative financial asset class and analyzes their impact on the existing monetary system. The research utilizes an active approach, combining literature review, case studies, and expert interviews to understand the macroeconomic and social challenges posed by cryptocurrencies. Key themes explored in the paper include:- The history and evolution of money, including the types and functions of money
- The impact of cryptocurrencies on monetary policy and the European Monetary System
- The intrinsic aspects of private cryptocurrencies and their potential benefits and drawbacks
- The external forces influencing the adoption of cryptocurrencies, such as government regulations and public perception
- The role of a central bank digital currency (CBDC) in the future of finance.
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter introduces the research topic, outlining the initial situation, objectives, research approach, theoretical and practical relevance, and methodology of the study. It also briefly explains the structure of the paper.
- History of Money: This chapter explores the evolution of money, discussing different types and functions of money, including medium of exchange, unit of account, and store of value. It also examines the emergence of cryptocurrencies and their potential to revolutionize the financial system.
- Monetary policy's cryptocurrency challenge: This chapter investigates the impact of cryptocurrencies on monetary policy and the European Monetary System. It analyzes the potential consequences of a decentralized financial system on monetary aggregates, fractional reserve banking, and the Austrian economic principles that underlie cryptocurrencies.
- Empirical Part: This chapter presents the empirical findings of the research. It explores the theoretical models of cryptocurrency adoption, discusses the research design and process, and details the data collection methods used, including interviews and questionnaires. It also examines the evaluation methods employed to analyze the findings.
Schlüsselwörter (Keywords)
The main focus of this research paper is on the acceptance of cryptocurrencies in the German economy. Key keywords and topics include: cryptocurrencies, Bitcoin, monetary policy, European Monetary System, Austrian economic principles, central bank digital currency (CBDC), adoption of new technologies, government regulations, public perception, and financial risk.- Quote paper
- Anonym (Author), 2018, What are the barriers to the acceptance of cryptocurrencies in the German economy?, Munich, GRIN Verlag, https://www.grin.com/document/458035
