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International Journal of Scientific and Research Publications

IJSRP, Volume 11, Issue 10, October 2021 Edition [ISSN 2250-3153]


The Model of Coexistence of Fiat and Cryptocurrency in an Economic Area
      Alessandro Raffelini
Abstract: This paper assesses an alternative economic and monetary model based on the coexistence between fiat and those cryptocurrencies that show real functionalities. A few years ago, I named the relation between cryptos and some independent factors which can influence the quantity demanded of virtual currency in a certain economic area {Qcy = f (p,y,t,e)}, the ‘the functioning demand curve of cryptocurrency’. In fact, the model shows that a coexistence between a currency and a cryptocurrency with real functionalities like Bitcoin may exist by reaching alternative equilibria along the curve that we can assume to be an economic or regional area with certain characteristics. By assuming the quantity of cryptocurrency that sellers are willing to accept, because households prefer to hold and spend this alternative functioning currency, is equal to Qcy, it could be possible theoretically to demonstrate that an equilibrium exists in which the quantity required in a given economic area matches the general demand and supply of money with this alternative form of liquidity.

Reference this Research Paper (copy & paste below code):

Alessandro Raffelini (2021); The Model of Coexistence of Fiat and Cryptocurrency in an Economic Area; International Journal of Scientific and Research Publications (IJSRP) 11(10) (ISSN: 2250-3153), DOI: http://dx.doi.org/10.29322/IJSRP.11.10.2021.p11869
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