Home  Journals  Finance and Credit  2(782) - 2019 February

The importance and prospects of cryptocurrency integration into the modern world's financial system

Vol. 25, Iss. 2, FEBRUARY 2019

Article PDF Version

Received: 10 September 2018

Received in revised form: 24 September 2018

Accepted: 8 October 2018

Available online: 28 February 2019

Subject Heading: INTERNATIONAL PAYMENT MECHANISMS

JEL Classification: E42, O33

Pages: 392–408

https://doi.org/10.24891/fc.25.2.392

Subject This article analyzes the prerequisites for the development and popularization of cryptocurrency from its first forms appearance to the current situation in the currency market and current trends in the economy.
Objectives The article aims to study the role of cryptocurrency in the modern financial system and assess its prospects of fiat money replacement.
Methods For the study, we used the methods of synthesis and analysis, comparison, formalization, and specification.
Results The article presents certain results of comparative analysis of the consumer value of precious metals, cash and cashless money, and cryptocurrency as different forms of money. It also provides an original assessment of risk and prospects associated with the introduction and application of cryptocurrency as a new form of money claiming full or partial substitution of fiat money in the modern financial system.
Conclusions and Relevance The weak integration of cryptocurrency into the mechanism of the current financial system does not allow cryptocurrency to be used as full-fledged money. A number of significant flaws of the mechanism of cryptocurrency cause reasons for which it can not fully perform all functions of money. The results of the research can be used to further improve the financial mechanism and technology of cryptocurrency as a potential element of the global financial system.

Keywords: monetary system, bitcoin, cryptocurrency, payment system, precious metals

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