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Cryptocurrency, Security, and Financial Intermediation

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  • NICHOLAS GLENN
  • ROBERT REED

Abstract

In recent years, the use of cryptocurrencies has increased. As these currencies continue to play a larger role, they eventually will be an important component of banking system activity. Moreover, in addition to the standard role of financial intermediaries to facilitate lending, intermediaries can be valuable firms that help provide safekeeping of tokens. The objective of this paper is to demonstrate these important functions in a microfounded model of monetary exchange. Furthermore, we also consider the possibility that central banks issue their own digital currencies that may affect the level of intermediation in the private banking system.

Suggested Citation

  • Nicholas Glenn & Robert Reed, 2024. "Cryptocurrency, Security, and Financial Intermediation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(1), pages 185-223, February.
    • Handle: RePEc:wly:jmoncb:v:56:y:2024:i:1:p:185-223
    DOI: 10.1111/jmcb.13027
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    References listed on IDEAS

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