Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/234860 
Year of Publication: 
2021
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 06-2021
Publisher: 
Philipps-University Marburg, School of Business and Economics, Marburg
Abstract: 
In recent years, cryptocurrencies such as Bitcoin have emerged, in upcoming years, corporate currencies such as Libra (Diem) and central bank digital currencies will emerge even in low-inflation developed economies. Using the dual currency search model of Kiyotaki and Wright (1993), we show how the introduction of a supplement to traditional money affects average utility. The room for a welfare improvement depends on differences in returns and costs, but, in particular, on the fraction of cash traders who will be replaced by digital money traders.
Subjects: 
digital money
dual currency regime
welfare comparison
JEL: 
E41
E42
E51
Document Type: 
Working Paper

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