Description
- Write up the literature review section of your proposal, draw your model and write up your hypothesis.(6-10 pages )
- it is necessary to include a model diagram that illustrates the relationships between variables, and based on that, the hypotheses should be written.
- The file attached related to assignment 3
- Avoid plagiarism
Research Methodology and Quantitative Analysis
BUS-606 Research Methodology and Quantitative Analysis
Atheer Abdullah AlGhamdi
2503071
Assignment 2
Course instructor: Dr. Mehad Alrawi
Faculty of administration and economics
Research Methodology and Quantitative Analysis
“The impact of the use of digital currencies on the global
financial system”
The importance of researching the impact of digital currencies on the global financial
system cannot be overstated, especially as central banks and financial institutions
worldwide increasingly explore the implications of these emerging technologies. Digital
currencies, particularly Central Bank Digital Currencies (CBDCs), represent a
significant shift in how monetary policy is implemented and how financial transactions
are conducted. This research is crucial for several reasons:
1. Transformation of Monetary Policy
Digital currencies have the potential to transform traditional monetary policy frameworks.
As central banks consider issuing CBDCs, understanding how these digital assets will
affect monetary operations is essential. Research indicates that CBDCs could alter the
transmission mechanisms of monetary policy, impacting interest rates, liquidity
management, and the overall effectiveness of monetary interventions.1 For instance, the
introduction of CBDCs may lead to changes in how central banks manage reserves and
influence short-term interest rates, which are critical for maintaining economic
stability.2
2. Financial Stability and Risk Management
The widespread adoption of digital currencies raises important questions about financial
stability. As digital currencies could potentially disintermediate traditional banks, there
is a risk that this could lead to increased volatility in financial markets and systemic
risks3. Research in this area can help identify the risks associated with digital currency
adoption, such as cybersecurity threats, market manipulation, and the implications for
consumer protection. Understanding these risks is vital for developing regulatory
frameworks that can mitigate potential negative impacts on the financial system.4
1
2
20201109.html
3 /
4 /
Faculty of administration and economics
Research Methodology and Quantitative Analysis
Conclusion
In conclusion, the research on the impact of digital currencies on the global financial system
is of paramount importance. It addresses critical issues related to monetary policy,
financial stability, regulatory frameworks, and economic inclusion. As the landscape of
digital finance continues to evolve, ongoing research will be essential for guiding
policymakers, financial institutions, and stakeholders in navigating the complexities of
this new financial paradigm.
Faculty of administration and economics
Research Methodology and Quantitative Analysis
References:
1. [The rise in popularity of central bank digital currencies. A systematic review PMC](/)
2. [Implications of Central Bank Digital Currency for Monetary Operations in: FinTech Notes
Volume 2024 Issue 007 (2024)]( )
3. [The Fed – Central Bank Digital Currency: A Literature
Review]( )
Faculty of administration and economics
Research Methodology and Quantitative Analysis
BUS-606 Research Methodology and Quantitative Analysis
Atheer Abdullah AlGhamdi
2503071
Assignment 2
Course instructor: Dr. Mehad Alrawi
Faculty of administration and economics
Research Methodology and Quantitative Analysis
“The impact of the use of digital currencies on the global
financial system”
The importance of researching the impact of digital currencies on the global financial
system cannot be overstated, especially as central banks and financial institutions
worldwide increasingly explore the implications of these emerging technologies. Digital
currencies, particularly Central Bank Digital Currencies (CBDCs), represent a
significant shift in how monetary policy is implemented and how financial transactions
are conducted. This research is crucial for several reasons:
1. Transformation of Monetary Policy
Digital currencies have the potential to transform traditional monetary policy frameworks.
As central banks consider issuing CBDCs, understanding how these digital assets will
affect monetary operations is essential. Research indicates that CBDCs could alter the
transmission mechanisms of monetary policy, impacting interest rates, liquidity
management, and the overall effectiveness of monetary interventions.1 For instance, the
introduction of CBDCs may lead to changes in how central banks manage reserves and
influence short-term interest rates, which are critical for maintaining economic
stability.2
2. Financial Stability and Risk Management
The widespread adoption of digital currencies raises important questions about financial
stability. As digital currencies could potentially disintermediate traditional banks, there
is a risk that this could lead to increased volatility in financial markets and systemic
risks3. Research in this area can help identify the risks associated with digital currency
adoption, such as cybersecurity threats, market manipulation, and the implications for
consumer protection. Understanding these risks is vital for developing regulatory
frameworks that can mitigate potential negative impacts on the financial system.4
1
2
20201109.html
3 /
4 /
Faculty of administration and economics
Research Methodology and Quantitative Analysis
Conclusion
In conclusion, the research on the impact of digital currencies on the global financial system
is of paramount importance. It addresses critical issues related to monetary policy,
financial stability, regulatory frameworks, and economic inclusion. As the landscape of
digital finance continues to evolve, ongoing research will be essential for guiding
policymakers, financial institutions, and stakeholders in navigating the complexities of
this new financial paradigm.
Faculty of administration and economics
Research Methodology and Quantitative Analysis
References:
1. [The rise in popularity of central bank digital currencies. A systematic review PMC](/)
2. [Implications of Central Bank Digital Currency for Monetary Operations in: FinTech Notes
Volume 2024 Issue 007 (2024)]( )
3. [The Fed – Central Bank Digital Currency: A Literature
Review]( )
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