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The Policy Implications of Competing Digital Currencies: An Examination of the Changing Global Monetary Order Due to the Rise of Private and Public Cryptocurrencies (provisional)

Huseyin Oguz Genc

This chapter will examine the policy implications of the emerging monetary paradigm driven by the rise of distributed ledger technology (DLT)-based digital currency systems in both the private and public sectors. In order to identify potential policy implications of the increased adoption of DLT-based monetary systems, the study examines parallel developments in historical context. A series of scenarios will be considered with regard to the implications of a flourishing crypto Eurodollar market for the stability of the global financial system, as a function of the unsustainable developments in the fiscal stability of the United States. The research incorporates case studies that provide practical evidence on the adoption process and the challenges faced in the context of rapid developments in the DLT-based digital currency space. By synthesizing the various elements at play, a comprehensive view of the evolving landscape of international finance in the age of digital currencies will be presented. The chapter concludes with a discussion of the key policy considerations for leveraging the advantages of digital innovation while ensuring economic stability and security. The realization of these objectives will require international collaboration, as the formation of a novel monetary framework will be a complex and politically charged process, in which radical policy outcomes, such as the elimination of cash, are being contemplated.