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Cryptocurrency aims to create a new type of digital asset distinct from traditional currencies like the U.S. dollar or checking accounts. However, for a currency to be truly useful it needs to reliably store value over time and serve as a standard unit to value and exchange goods and services, which are two key functions of traditional money according to the Federal Reserve. In summary, while cryptocurrency creates new digital assets, it remains to be seen if those assets can achieve the stability and usefulness of traditional currencies.

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8 views

CD Diff

Cryptocurrency aims to create a new type of digital asset distinct from traditional currencies like the U.S. dollar or checking accounts. However, for a currency to be truly useful it needs to reliably store value over time and serve as a standard unit to value and exchange goods and services, which are two key functions of traditional money according to the Federal Reserve. In summary, while cryptocurrency creates new digital assets, it remains to be seen if those assets can achieve the stability and usefulness of traditional currencies.

Uploaded by

Joyce
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Cryptocurrency

Functions of Money
Federal Reserve1 At the heart of any to act as a stable store
cryptocurrency is the of value that people
creation of a new type can hold and use
of asset--the unit of predictably in the
the cryptocurrency future,
itself--that is distinct
from any traditional and to serve as a
form of money used meaningful unit of
in routine account that can be
transactions, such as used to assign a
U.S. currency or comparable value of
checking accounts in goods and services.
commercial banks. 2

1 https://www.federalreserve.gov/newsevents/speech/brainard20180515a.htm
2 https://www.federalreserve.gov/newsevents/speech/brainard20180515a.htm

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