Monetary Policy and Cryptocurrencies: Much Noise for Nothing?

Abdelkader Derbali^{1, 2,} , Fathi Jouini³, Lamia Jamel^{4, 3} and Mohamed Bechir Chenguel²

¹Department of Finance, Community College, Taibah University, Medinah, Saudi Arabia

²Department Finance, Higher Institute of Informatics and Management of Kairouan, Kairouan University, Kairouan, Tunisia

³Department of Economic, Faculty of Economic Sciences and Management of Sousse, Sousse University, Sousse, Tunisia

⁴Department of Economic, College of Business Administration, Taibah University, Medinah, Saudi Arabia

Cite this paper:
Abdelkader Derbali, Fathi Jouini, Lamia Jamel and Mohamed Bechir Chenguel. Monetary Policy and Cryptocurrencies: Much Noise for Nothing?. International Journal of Business and Risk Management. 2019; 2(1):1-8. doi: 10.12691/ijbrm-2-1-1

Abstract

At the beginning of 2017, there were more than 500 digital currencies (DC) for a total market value of $ 16.8 billion or € 16 billion, the Bitcoin, launched in early 2009, representing alone about 85% of the market. In comparison, euro banknotes and coins in circulation at the end of 2016 amounted to EUR 1 150 billion, 72 times more, for the single currency in fiduciary form. However, some authors have suggested that increased use of DCs could, at some point and under certain circumstances, have profound consequences for the financial system and the conduct and effectiveness of monetary policy (Raskin and Yermack, 2016; Bordo and Levin, 2017). Under the same hypothesis that the consequences of monetary policy can only be significant if the use of DC was widespread, this article offers a more nuanced view. The first part recalls the main characteristics of DCs. The third part looks at Consequences and adjustments of monetary policy from widespread use of digital currencies. In this part, we describe scenarios of widespread use of DCs and their consequences for monetary policy. The fourth part concludes.

Keywords:
digital currencies cryptocurrencies blockchains monetary policy

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