Confidence in digital money: Are central banks more trusted than age is matter?
The virtual nature of digital money is fueling the conflict between usability, functionality and trust in the digital form. Institutional trust drivers should move forward in understanding the nature of confidence in digital money. Do central banks digital money (CBDC – central bank digital currency...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2021-01-01
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| Series: | Investment Management & Financial Innovations |
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| Online Access: | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/14576/IMFI_2021_01_Koziuk.pdf |
| _version_ | 1826906504919252992 |
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| author | Viktor Koziuk |
| author_facet | Viktor Koziuk |
| author_sort | Viktor Koziuk |
| collection | DOAJ |
| description | The virtual nature of digital money is fueling the conflict between usability, functionality and trust in the digital form. Institutional trust drivers should move forward in understanding the nature of confidence in digital money. Do central banks digital money (CBDC – central bank digital currency) and private cryptocurrencies demonstrate the same or different trust patterns? The paper used the general regression method to discover the relationship between trust in different forms of digital money and selected variables that may generate this trust. Simple empirical tests were sufficient to find the fundamental importance of age as a confidence driver relevant to CBDC and cryptocurrencies. It is found that traditional factors associated with the inflation history and quality of monetary order (central banks independence and rule of law) do not play a role in the case of CBDC, but are important in the case of cryptocurrencies. Structural features (like FinTech development or social trust) that should support trust in digital money are not found to be important. Societies with larger fraction of younger generations demonstrate higher confidence in centralized and decentralized forms of digital money. This challenges the traditional approach to money and calls into question the future role of monetary stability institutions in the digital age. Digitalization is perceived as an improvement in welfare only when fiat money institutions become fragile. The efficiency and credibility of central banks are not a bonus to confidence in CBDC. This is a challenge for the institutional design of the future digital-based monetary order. |
| first_indexed | 2024-12-14T08:49:03Z |
| format | Article |
| id | doaj.art-ecc94c5924574c918a4f748b8422719a |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2025-02-17T08:48:14Z |
| publishDate | 2021-01-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-ecc94c5924574c918a4f748b8422719a2025-01-02T20:39:48ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582021-01-01181123210.21511/imfi.18(1).2021.0214576Confidence in digital money: Are central banks more trusted than age is matter?Viktor Koziuk0https://orcid.org/0000-0002-5715-2983Doctor of Economics, Professor, Head of Economics Department at West Ukrainian National UniversityThe virtual nature of digital money is fueling the conflict between usability, functionality and trust in the digital form. Institutional trust drivers should move forward in understanding the nature of confidence in digital money. Do central banks digital money (CBDC – central bank digital currency) and private cryptocurrencies demonstrate the same or different trust patterns? The paper used the general regression method to discover the relationship between trust in different forms of digital money and selected variables that may generate this trust. Simple empirical tests were sufficient to find the fundamental importance of age as a confidence driver relevant to CBDC and cryptocurrencies. It is found that traditional factors associated with the inflation history and quality of monetary order (central banks independence and rule of law) do not play a role in the case of CBDC, but are important in the case of cryptocurrencies. Structural features (like FinTech development or social trust) that should support trust in digital money are not found to be important. Societies with larger fraction of younger generations demonstrate higher confidence in centralized and decentralized forms of digital money. This challenges the traditional approach to money and calls into question the future role of monetary stability institutions in the digital age. Digitalization is perceived as an improvement in welfare only when fiat money institutions become fragile. The efficiency and credibility of central banks are not a bonus to confidence in CBDC. This is a challenge for the institutional design of the future digital-based monetary order.https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/14576/IMFI_2021_01_Koziuk.pdfcentral bank digital currencycryptocurrencydigitalizationinstitutionstrust |
| spellingShingle | Viktor Koziuk Confidence in digital money: Are central banks more trusted than age is matter? Investment Management & Financial Innovations central bank digital currency cryptocurrency digitalization institutions trust |
| title | Confidence in digital money: Are central banks more trusted than age is matter? |
| title_full | Confidence in digital money: Are central banks more trusted than age is matter? |
| title_fullStr | Confidence in digital money: Are central banks more trusted than age is matter? |
| title_full_unstemmed | Confidence in digital money: Are central banks more trusted than age is matter? |
| title_short | Confidence in digital money: Are central banks more trusted than age is matter? |
| title_sort | confidence in digital money are central banks more trusted than age is matter |
| topic | central bank digital currency cryptocurrency digitalization institutions trust |
| url | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/14576/IMFI_2021_01_Koziuk.pdf |
| work_keys_str_mv | AT viktorkoziuk confidenceindigitalmoneyarecentralbanksmoretrustedthanageismatter |