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Democratizing money? The role of cryptocurrencies

Author

Listed:
  • Jacopo Temperini

    (Sapienza University of Rome)

  • Marcella Corsi

    (Sapienza University of Rome)

Abstract

The article proposes a critical perspective on the potential impact of the growing cryptocurrency ecosystem on the process of democratizing money. After examining the various interpretations of the term "democratization", we focus on one interpretation: that of financial inclusion. We propose a categorization of currently available cryptocurrencies, distinguishing four macro-categories: Bitcoin; altcoins, which include all alternative and/or complementary cryptocurrencies to bitcoin; stablecoins, which are digital coins whose value is pegged to a fiat currency; and central bank digital currencies (CBDCs). We provide a description of the economic characteristics of each category and analyse how and whether these instruments can contribute to financial inclusion. While each category appears to be capable of contributing to the democratization of money, CBDCs are the only ones that can truly pursue the goal of financial inclusion. Therefore, we argue that it is not money as such that needs to be democratized, but rather the role that central banks play in the economic system.

Suggested Citation

  • Jacopo Temperini & Marcella Corsi, 2023. "Democratizing money? The role of cryptocurrencies," PSL Quarterly Review, Economia civile, vol. 76(304), pages 51-66.
    • Handle: RePEc:psl:pslqrr:2023:13
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    File URL: https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/17967/16984
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    References listed on IDEAS

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    Cited by:

    1. Francisco Elieser Giraldo-Gordillo & Ricardo Bustillo-Mesanza, 2025. "The Effects of CBDCs on Mobile Money and Outstanding Loans: Evidence from the eNaira and SandDollar Experiences," FinTech, MDPI, vol. 4(3), pages 1-17, August.
    2. Temperini, Jacopo & D'Ippoliti, Carlo & Gobbi, Lucio, 2024. "Is the time ripe for helicopter money? Growth impact and financial stability risks of outright monetary transfers," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 24-36.
    3. Sergio Luis Náñez Alonso & Miguel Ángel Echarte Fernández & Konrad Kolegowicz & David Sanz-Bas & Javier Jorge-Vázquez, 2023. "¿Qué impulsa la adopción de CBDC o bitcoin? Evidencia derivada de la experiencia del Caribe, Centroamérica y Sudamérica," Ensayos de Economía 21224, Universidad Nacional de Colombia Sede Medellín.

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    Keywords

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    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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