The rise in popularity of cryptocurrencies: an economic perspective

Abstract

Financial innovation has entered into a new era in which a digitalized system and cryptocurrency have been created. The study will focus on the main uses of the cryptocurrency, how it developed and what were its initial reasons of use. Diving into the reason this currency gained such popularity over the recent years.

The ability to perform the swift transaction of any value could become a substitute way to affect payments. The growing use of this form of currency could have an effect on the fiat currency and intermediaries who offer swift transaction services, as these financial institutions would be cut out of the process. The volatility of these currencies makes it harder for them to overtake the fiat currencies since users fear that the fluctuations in value, put companies at risk of variations in financial position.

Benefits such as transparency in the amount of coins supplied due it’s decentralised nature allows for piece of mind to the investors; examining the adoption of cryptocurrencies as a medium of exchange by the Maltese consumer. Through a series of interviews, this research delves deeper into the subject by questioning relevant practitioners potentially effected by the rise in this phenomenon. Further investigating the repercussions these assets have on the Maltese economy, once the newly established regulation is implemented.