Digital currency

Author – Ruchita Bendugade (MMS10002)

1. Future digital money
New digitalized entrants into payment services and financial intermediation are also reshaping the monetary-financial landscape. Central banks properly addressed the rise of private digital currencies such as Bitcoin with just a study approach, since they do not pose any risk to the current monetary-financial system. To capture their creation and destruction processes through sectoral balance sheet dynamics; and to identify the inherent risks to the current monetary-financial system, also known as the fractional reserve banking system. These risks, which stem from sudden shifts in money demand and supply, are as follows: (I) risk of a cashless society (II) risk of structural bank disintermediation

2. Digital money
Everyone seems to know about the austere café in the hip part of town, sing its praises, and universally declare that “all the famous people hang out there.” But, in largely cashless Stockholm, it is even more distinguished by its owner’s stark refusal to accept electronic payments During those moments, he unwittingly challenged the hackneyed understanding of cash as a “cold nexus” that allows for the social separation of transactors, removing cultural and personal barriers to a potential trade.

3. Cashless transaction
The emergence of e-commerce is a global phenomenon across developing countries. Nevertheless, the expectations in its development have not been completely met, as significant differences still exist between online and offline purchases related to e-commerce. Data-based transmission and electricity are essential support systems required to improve the security of the personal data of consumers using e-commerce. perceived usefulness, perceived ease of use, social influence, lifestyle compatibility, and perceived trust displayed a significant positive effect on both intentions to use an e-wallet and adoption of an e-wallet. This study evidenced the mediating effect of the intention to use an e-wallet on the correlations between the predictors and adoption of an e-wallet.

4. Retail payment
Retail payment services in Latin America and the Caribbean are characterised by high costs and insufficient access for large swathes of the region’s population. To overcome these limitations, some of the larger central banks in the region have taken the lead to introduce fast retail payments and develop an open banking ecosystem. Several othershave launched central bank digital currency pilots. Despite the widespread adoption of mobile and internet technology, countries in Latin America and the Caribbean (LAC) have not been at the forefront of payment innovation. Relative to other regions, retail payment services in LAC continue to involve high costs for end users and be of subpar efficiency, partly reflecting low competition among financial institutions and limited compatibility among different payment solutions.

5. Digital money – Bitcoin
When dealing with digital currencies, a key issue is to prevent double-spending,
i.e., the risk of someone using the same cash tokens more than once. Unlike physical
banknotes and traditional instruments to handle bank deposits, such as checks and debit and credit cards, which are difficult to duplicate, copies of digital artifacts are typically easy to make and indistinguishable from one another, which is a concern for digital cash. Before Bitcoin, the most well-known attempts to create a digital currency were proposed.

6. Risk of e- payment
“Despite the growing importance of the debit card in most developed countries, there are relatively few academic studies that analyze the impact of such evolution on the demand for cash” . Moreover, research in this area focuses on the transaction motive and the choice between cash and electronic payment instruments, which means that it is only partially relevant to our paper. However, the literature review presented below presents state-of-the-art research on the determinants of the spread of e-payments and their impact on the demand for cash.

7. Impact of cashless
The emergence of social media has facilitated modern business with a digital platform in order to communicate with customers interactively . Social media provides a flexible and interactive forum for businesses in the current age of digitalization. Likewise, social media have revolutionized the field of marketing as the importance of social commerce is being recognized by different contemporary researchers. This is perhaps the reason that modern businesses recognize social media as a key player in order to involve different stakeholders, which include involving customers meaningfully with a brand. Social media has brought a substantial change in the field of organizational communication as a new communication medium especially when it takes place from the traditional communication model, which is a one-way model of communication.

8. Impact of digital banking
The authors analyzed the allocation and dynamics of deposits by volumes, currency, sectors of the economy and terms of repayment. The results of the study allow claiming that banks’ deposit policy needs constant improvement. To increase its efficiency, there are several ways, such as creating favourable conditions to meet customer needs in deposit services; ensuring the protection of depositors’ interests, which, in turn, will increase the reliability of banks and the efficiency in the process of converting savings into investments; active digitalization of banks’ relations with clients in solving all financial issues, including in the deposit sphere, which will simplify customer service processes and increase the banks’ resources by attracting new categories of customers due to innovative deposit products with favourable terms.

9. Digital banking ecosystem
Digital finance is an emerging frontier of financial sector development in the contemporary 21st century. In spite of the known benefits of digital finance, there is a widely held view that digital financial services have not adequately permeated vast segments of society given the disparities in the availability of finance, its accessibility, and use. Therefore, the evolution of financial technologies along with digital consumer behaviourism in the present age presents scope for remodelling conventional financial business models to particularly enhance the financial inclusion of Generation Z.

10. E-commerce GDP
consists of two parts, the first one analyses the impact of the mobile commerce ‘s growth on the Gross Domestic Product for both a West European country – Germany and an East European country – Romania from 2014 to 2019 . The analysis aims to understand the mobile commerce importance in the pre-COVID-19 era, in the context of stable economies. The second part studies the general consumer behavior towards classic commerce and electronic commerce in the context of COVID-19 pandemic state. In this regard we analyzed data for January-April 2020 and studied the main changes for the countries which were either early affected by the pandemic, severely affected or both.

Fear of COVID-19 contagion through bank notes and coins has accelerated a move away from cash to digital payments – a move that has also reinvigorated digital assets and reinforced discussions about Central Bank Digital Currencies (CBDC). As a result of this shift in payment preferences, monetary authorities around the world are increasingly looking at central bank digital currencies (CBDCs) as an alternative way to make transactions in an increasingly digitalised world. Unlike Bitcoin, CBDCs are not a new type of currency, but rather a digital form of hard currency that is backed and issued by the central bank.

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