Financial crisis and digital currencies
Digital currencies are mainly known for their part in illegal activities such as money laundering or terrorist financing. However, the purpose of this chapter is to explore whether digital currencies could have a potential benefit for countries who are in financial crisis. Since 2007 the global financial crisis has affected many different countries and no more so than Greece where the austerity measures and fiscal issues have caused an enormous social and political upheaval. The global economy has been hit by the lack of trust and confidence the ordinary person has for banks, financial intuitions and in some countries the governing body. Banks were created in the 1400’s in Florence to ensure that society could trust that their money or currency at the time, would be safe. Following the global crisis, this trust and confidence in the banks and financial institutions has been eroded. This chapter considers whether a digital, decentralised cryptocurrency where peer-to-peer transactions and lending takes place, could replace the trust and confidence that was once found in banks.
The chapter is therefore divided into several parts. The chapter begins by examining what digital currencies are and how they differ from other platform based currencies which could not be used at the present time as a form of currency within countries. The chapter then moves onto explore Bitcoins and how they are the leading digital currency currently and whether they have the potential to act as a States’ currency. This then leads the chapter into discussing the financial crisis and digital currencies as an alternative to the sovereign currency of a State. In particular, the chapter uses Greece’s tumultuous journey through the financial crisis as an example of a State exploring advantages and disadvantages of a cryptocurrency as an alternative currency. The chapter concludes by opining whether digital currencies have a future in financial crisis management and whether the law or State can intervene.
Chambers-Jones, C. (2017). Financial crisis and digital currencies. In N. Ryder, U. Turksen, & J. Tucker (Eds.), The Financial Crisis and White Collar Crime - Legislative and Policy ResponsesRoutledge
|Publication Date||Feb 6, 2017|
|Peer Reviewed||Peer Reviewed|
|Book Title||The Financial Crisis and White Collar Crime - Legislative and Policy Responses|
|Keywords||financial crisis, digital currencies|
|Additional Information||This is the accepted version of the book chapter, which has been published in final form in the book The Financial Crisis and White Collar Crime - Legislative and Policy Responses, available from https://www.routledge.com/The-Financial-Crisis-and-White-Collar-Crime---Legislative-and-Policy-Responses/Ryder-Turksen-Tucker/p/book/9780367030315|
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