The creators of cryptocurrencies have often positioned themselves as the advocates of individuals versus the large banks. They have championed peer-to-peer money transfers which results in financial disintermediation (that is cutting out the banks). It is also a way to avoid government oversight (positive side - more individual liberty; negative side - tax avoidance and money laundering) In addition, since cryptocurrencies have fixed amounts of currency (most notably Bitcoin), there would be no inflationary effect of central banks pumping money into the economy. So is there a way to integrate cryptocurrencies into a fractional reserve banking system? Read the following artic 1) Would integrating cryptocurrencies into the banking system undermine the essential goal of peer-to-peer transactions? 2) If you do have fractional reserve banking for cryptocurrencies, what entity should provide oversight - the Federal Reserve or some sort of multinational body since cryptocurrency banks wouldn't need to have a physical location? 3) Would you deposit your money into a cryptocurrency bank?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
Please answer all 3 questions.
The creators of cryptocurrencies have often positioned themselves as the advocates of individuals versus the large banks. They have championed peer-to-peer
money transfers which results in financial disintermediation (that is cutting out the banks). It is also a way to avoid government oversight (positive side - more
individual liberty; negative side - tax avoidance and money laundering) In addition, since cryptocurrencies have fixed amounts of currency (most notably Bitcoin),
there would be no inflationary effect of central banks pumping money into the economy.
So is there a way to integrate cryptocurrencies into a fractional reserve banking system?
Read the following artic ratu
1) Would integrating cryptocurrencies into the banking system undermine the essential goal of peer-to-peer transactions?
2) If you do have fractional reserve banking for cryptocurrencies, what entity should provide oversight - the Federal Reserve or some sort of multinational body
since cryptocurrency banks wouldn't need to have a physical location?
3) Would you deposit your money into a cryptocurrency bank?
Transcribed Image Text:The creators of cryptocurrencies have often positioned themselves as the advocates of individuals versus the large banks. They have championed peer-to-peer money transfers which results in financial disintermediation (that is cutting out the banks). It is also a way to avoid government oversight (positive side - more individual liberty; negative side - tax avoidance and money laundering) In addition, since cryptocurrencies have fixed amounts of currency (most notably Bitcoin), there would be no inflationary effect of central banks pumping money into the economy. So is there a way to integrate cryptocurrencies into a fractional reserve banking system? Read the following artic ratu 1) Would integrating cryptocurrencies into the banking system undermine the essential goal of peer-to-peer transactions? 2) If you do have fractional reserve banking for cryptocurrencies, what entity should provide oversight - the Federal Reserve or some sort of multinational body since cryptocurrency banks wouldn't need to have a physical location? 3) Would you deposit your money into a cryptocurrency bank?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Equilibrium Point
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education