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The Pros And Cons Of Virtual Currency

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In regards to the statement above, virtual currency may not be viewed as money, but that does not necessary mean it has no implications for Central Bankers and Monetary Policy. In the following article, I will define virtual currency and its different forms and also give reasoning for each explanation in relation to the Central Bankers and Monetary Policy. Money. It is known as the root of all evil and the barometer of a society’s virtue. From as long as I can remember, earning and spending money has always been at the centre of everyone’s pursuits. Those pieces of paper that everybody holds in their wallets or bank accounts which represents a specific amount of gold, are at everyone’s best interests. But when the Federal Reserve started printing money at -will, this vague meaning diminished. Money slowly became a points-system and this is where virtual currency comes to life. Virtual currency is a term ‘defined as a digital representation of value, not issued by a …show more content…

Although, these impacts are heavily dependent on other factors. It is a situation where ‘if this happens’, then Virtual Currencies will influence ECB. For example, Virtual Currencies could have an impact on Central Bankers if it affects the demand of the Central Bank’s liabilities and interferes with the supply of money. Also, if Virtual Currencies is created outside the reach of the Central Banks, this could easily have implications for the way interest rates decisions made by the ECB are sent through the economy and therefore, the Central Banks control over money may be less effective. However, as I have stated, these implications are only a threat to the Central Bank if other factors are influential as well. As it stands, according to the ECB’s report 2012, Virtual Currencies did not pose a menace to price stability in practice, provided that the ‘volume of virtual currency continued to be stable and their usage

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