AN EVALUATION OF THE MACROECONOMIC EFFECTS OF CRYPTOCURRENCY IN MODERN ECONOMY: A LITERATURE REVIEW

The macroeconomic consequences of cryptocurrency have been on top of the minds of policymakers (domestic and international), non-governmental organizations, multilateral development banks, and financial services providers. This paper reviewed the previous literature to evaluate the range of macroeconomic implications of the introduction of cryptocurrency in a modern economy. The review showed that cryptocurrency may extend financial accessibility in a modern economy by relying on more effective distribution models that could advance financial deepening and inclusion. The paper also found that cryptocurrency serves as a hedge, diversifier, and safe haven for a range of foreign currencies, and given the absence of regulations, there are no protections to ensure the successful launching of the cryptocurrency market. The paper concludes that public-private partnerships are imperative to help central banks and financial regulators of modern economies keep up with the fast-moving pace of cryptocurrency developments and applications.