Two Sides of a Digital Coin: Comparison of CBDC and Cryptocurrencies
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Abstract
This paper aims to compare central bank digital currencies (CBDCs) and cryptocurrencies by examining their fundamental differences, with a focus on their implications for financial inclusion, political and corporate influence, and monetary policy effectiveness.
The analysis is based on a conceptual and comparative approach, drawing on an extensive literature review and theoretical insights to identify and contrast the key characteristics, advantages, and disadvantages of both CBDCs and cryptocurrencies. The findings highlight that cryptocurrencies offer greater resistance to political and corporate control and support decentralized financial systems, while CBDCs provide enhanced tools for monetary policy implementation and state oversight. Both models have the potential to improve financial inclusion, but their approaches differ: CBDCs rely on institutional infrastructure, whereas cryptocurrencies depend on technological accessibility and user digital literacy. The study also reveals that CBDC could pose risks to personal financial autonomy, while cryptocurrencies may undermine monetary stability in less developed economies. This paper contributes to the understanding of digital money by presenting a structured comparison of two competing models, offering insights into their complementary potentials and long-term implications for the global financial system. Unlike most existing studies, the analysis integrates the perspectives of financial inclusion, political and corporate influence, and monetary policy effectiveness within a single comparative framework. In addition, it emphasizes the relevance of these issues for emerging markets and developing economies, where the introduction of CBDCs or the widespread use of cryptocurrencies could generate distinctive challenges and opportunities. It also highlights how their interaction may shape future developments in financial infrastructure, regulation, and user trust.
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