How Do Private Digital Currencies Affect Government Policy?

22 Pages Posted: 20 Aug 2019 Last revised: 1 Dec 2022

See all articles by Max Raskin

Max Raskin

New York University School of Law

Fahad Saleh

Wake Forest University - Schools of Business

David Yermack

New York University (NYU) - Stern School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: October 27, 2022

Abstract

We provide a systematic classification and evaluation of the different types of digital currencies. We express skepticism regarding centralized digital currencies and focus our economic analysis on private digital currencies. We specifically highlight the potential for private digital currencies to improve welfare within an emerging market with a selfish government. In that setting, we demonstrate that a private digital currency not only improves citizen welfare but also encourages local investment and enhances government welfare. The fact that a private digital currency enhances government welfare implies a permissive regulatory policy which enables citizens to realize the previously referenced welfare gains.

Keywords: Cryptocurrency, Digital Currency, Bitcoin, Blockchain

JEL Classification: E42, F30, G18, O38

Suggested Citation

Raskin, Max and Saleh, Fahad and Yermack, David, How Do Private Digital Currencies Affect Government Policy? (October 27, 2022). NYU Stern School of Business, NYU Law and Economics Research Paper No. 20-05, Available at SSRN: https://ssrn.com/abstract=3437529 or http://dx.doi.org/10.2139/ssrn.3437529

Max Raskin (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Fahad Saleh

Wake Forest University - Schools of Business

P.O. Box 7659
Winston-Salem, NC 27109-7285
United States

David Yermack

New York University (NYU) - Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY 10012-1126
United States
212-998-0357 (Phone)
212-995-4220 (Fax)

HOME PAGE: http://www.stern.nyu.edu/~dyermack

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