Abstract
Blockchain technology and its application to cryptocurrencies is gaining increasing importance in many sectors. Current events, including the hotly-debated announcement of the launch of Facebook’s digital currency ‘Libra’ illustrate that the topic is now as relevant as ever. In the present article, we investigate whether blockchain technology and cryptocurrencies have the potential to one day replace or offer a serious alternative to central banking and the traditional financial sector by illustrating how blockchain technology functions and offering a brief review of the 2008 global financial crisis in the light of blockchain technology. Furthermore, stablecoins and current events relating to central banking and cryptocurrencies are discussed, along with whether gold-backed cryptocurrencies could serve as a capital asset. Finally, the compliance risks of cryptocurrencies are demonstrated, including a re-enactment of the concrete steps that criminals take to launder their incriminated funds, finance terrorist groups or bribe corrupt foreign officials.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Admati, A.: Five years of financial non-reform, 13 September 2013 (2013). https://www.project-syndicate.org/commentary/the-failure-of-bank-reform-since-2008-by-anat-admati?barrier=accesspaylog. Accessed 15 Nov 2019
Adrian, T., Mancini-Griffoli, T.: Digital currencies: the rise of stablecoins, 19 September 2019 (2019). https://blogs.imf.org/2019/09/19/digital-currencies-the-rise-of-stablecoins/. Accessed 11 Nov 2019
Baydakova , A., De, N.: All global crypto exchanges must now share customer data, FATF rules (2019). https://www.coindesk.com/fatf-crypto-travel-rule. Accessed 8 Nov 2019
Bajpay, P.: Countries where Bitcoin is legal and illegal (DISH, OTSK) (2019). https://www.investopedia.com/articles/forex/041515/countries-where-bitcoin-legal-illegal.asp. Accessed 15 Nov 2019
Bheemaiah, K.: Block chain 2.0: the renaissance of money (2015). https://www.wired.com/insights/2015/01/block-chain-2-0/. Accessed 14 Nov 2019
Biryukov, A., Feher, D.: Deanonymization of hidden transactions in Zcash. University of Luxembourg, Luxembourg, 8 May 2018 (2018). https://cryptolux.org/images/d/d9/Zcash.pdf. Accessed 14 Nov 2019
Bitcoinblockhalf.com. Bitcoin block reward halving countdown (2019). https://www.bitcoinblockhalf.com/. Accessed 26 Nov 2019
BitDegree. Full information on where and how to buy cryptocurrency, 23 September 2019 (2019). https://www.bitdegree.org/tutorials/how-to-buy-cryptocurrency/. Accessed 11 Nov 2019
Blockchain. 2019 state of stablecoins (2019). https://www.blockchain.com/research. Accessed 12 Nov 2019
Blockchain Team. Shining light on the state of stablecoins, 26 September 2018 (2018). https://blog.blockchain.com/2018/09/26/the-state-of-stablecoins/. Accessed 11 Nov 2019
Blockgeeks. Was ist eine Kryptowährung: Alles, was Sie wissen müssen! (2019). https://blockgeeks.com/guides/de/was-ist-kryptowahrung/. Accessed 23 July 2019
Böhme, R., Pesch, P.: Technische Grundlagen und datenschutzrechtliche Fragen der blockchain-Technologie. Datenschutz und Datensicherheit (8/2017), 473–481 (2017)
Budman, M., Hurley, B., Khan, A., Gangopadhay, N., Moreano, E., Barman, T., Chakraborty, A., Podevin, J.F.: Deloitte’s 2019 global blockchain survey. Deloitte Insights (2019). https://www2.deloitte.com/content/dam/Deloitte/se/Documents/risk/DI_2019-global-blockchain-survey.pdf. Accessed 15 Nov 2019
Cant, J.: Central banks have three options for crypto regulations, says official (2019). https://cointelegraph.com/news/central-banks-have-three-options-for-crypto-regulations-says-official. Accessed 11 Nov 2019
Carney, M.: The growing challenges for monetary policy in the current international monetary and financial system. In: Speech at the Jackson Hole Symposium 2019, Kansas City, USA, 22–24 August 2019 (2019). https://www.bankofengland.co.uk/-/media/boe/files/speech/2019/the-growing-challenges-for-monetary-policy-speech-by-mark-carney.pdf. Accessed 11 Nov 2019
Clancy, L.: ECB’s Löber: Facebook’s libra a ‘black hole’ of legal certainty, 8 November 2019 (2019). https://www.centralbanking.com/fintech/crypto-assets/4535336/ecbs-lober-facebooks-libra-a-black-hole-of-legal-certainty. Accessed 11 Nov 2019
Coin ATM Radar. Bitcoin ATM map (2019). https://coinatmradar.com/. Accessed 15 Nov 2019
CoinDance. LocalBitcoins volume charts, updated weekly (2019). https://coin.dance/volume/localbitcoins. Accessed 11 Nov 2019
Crosby, M., Nachiappan, Pattanyak, P., Verma, S., Kalyanaraman, V.: BlockChain technology, beyond bitcoin. Sutardja Center for Entrepreneurship & Technology Technical Report, Berkeley Engineering, Berkeley, USA. 16 October 2015 (2015). http://scet.berkeley.edu/wp-content/uploads/BlockchainPaper.pdf. Accessed 13 Nov 2019
De, N.: US lawmakers ask Fed to consider developing “national digital currency” (2019). https://www.coindesk.com/us-congressmen-ask-fed-to-consider-developing-national-digital-currency. Accessed 11 Nov 2019
Fasching, J.: Anwendungsbereiche und ausgewählte Rechtsfragen der Blockchain-Technologie. Master thesis, Wien, Austria (2017). http://www.it-law.at/publikation/anwendungsbereiche-und-ausgewaehlte-rechtsfragen-der-blockchain-technologie/. Accessed 31 Oct 2019
Fortney, L.: Blockchain explained, 25 June 2019 (2019). https://www.investopedia.com/terms/b/blockchain.asp. Accessed 14 Nov 2019
Financial Stability Board: Crypto-assets regulators directory, 5 April 2019 (2019). https://www.fbs.org/2019/04/crypto-assets-regulators-directory/. Accessed 15 Nov 2019
Government of Liechtenstein. Report and application of the government to the parliament of the Principality of Liechtenstein concerning the creation of a law on tokens and TT service providers (Tokens and TT Service Provider Act; TVTG) and the amendment of other laws. (No. 54/2019) (2019). https://impuls-liechtenstein.li/wp-content/uploads/2019/11/054_Report-and-Application_TVTG_extract.pdf. Accessed 14 Nov 2019
Hays, D.: Gold stablecoins (2019). https://cryptoresearch.report/crypto-research/gold-stablecoins/. Accessed 13 Nov 2019
Helleiner, E.: Understanding the 2007–2008 global financial crisis: lessons for scholars of international political economy. Annu. Rev. Polit. Sci. 14, 67–87 (2011)
Hess, M., Lienhard, S.: Übertragung von Vermögenswerten auf der Blockchain. Jusletter, 4 December 2017 (2017). https://jusletter.weblaw.ch/it/dam/publicationsystem/articles/jusletter/2017/917/ubertragung-von-verm_f9547d5d9a/Jusletter_ubertragung-von-verm_f9547d5d9a_de.pdf. Accessed 26 Nov 2019
Hess, M., Spielmann, P.: Cryptocurrencies, Blockchain, Handelsplätze & Co. – Digitalisierte Werte unter Schweizer Recht. In: Reutter, T., Werlen, T. (eds.) Kapitalmarkt – Recht und Transaktionen XII, Zürich, Switzerland, pp. 145–203 (2017)
Hess, R.: Der Betreff des Bösen: Bank blockiert Zahlungen wegen arabischem Namen (2014). https://www.aargauerzeitung.ch/wirtschaft/der-betreff-des-boesen-bank-blockiert-zahlung-wegen-arabischem-namen-128361118. Accessed 2 July 2019
Hoffmann, M.: Sieben Mythen über Gold, 10 December 2009 (2009). https://www.focus.de/finanzen/boerse/gold/tid-16460/geldanlage-sieben-mythen-ueber-gold_aid_459823.html. Accessed 13 Nov 2019
Iacangelo, S.: Blockchain – Einordnung, Projekte und Chancen. Jusletter, 4 June 2018 (2018). https://jusletter.weblaw.ch/juslissues/2018/938.html. Accessed 26 Nov 2019
John, A.: China’s digital currency will kick off ‘horse race’: central bank official, 6 November 2019 (2019). https://www.reuters.com/article/us-china-markets-digital-currency/chinas-digital-currency-will-kick-off-horse-race-central-bank-official-idUSKBN1XG0BI. Accessed 14 Nov 2019
Kaaru, S.: European Central Bank exec slams Libra as “cartel-like”, 3 September 2019 (2019). https://coingeek.com/european-central-bank-exec-slams-libra-as-cartel-like/. Accessed 11 Nov 2019
King, R.: Argentine central bank restricts crypto asset purchases, 5 November 2019 (2019). https://www.centralbanking.com/fintech/crypto-assets/4529361/argentine-central-bank-restricts-crypto-asset-purchases. Accessed 11 Nov 2019
LaVere, M.: Argentina’s central bank issues ban on Bitcoin purchases with credit cards, 3 November 2019 (2019). https://www.cryptoglobe.com/latest/2019/11/argentinas-central-bank-issues-ban-on-bitcoin-purchases-with-credit-cards/. Accessed 11 Nov 2019
Libra Association. Whitepaper (2019). https://libra.org/de-DE/white-paper/. Accessed 11 Nov 2019
Majaski, C.: Seigniorage, 20 April 2019 (2019). https://www.investopedia.com/terms/s/seigniorage.asp. Accessed 15 Nov 2019
Nakamoto, S.: Bitcoin: a peer-to-peer electronic cash system (2009). https://bitcoin.org/bitcoin.pdf. Accessed 29 Oct 2019
Neumann, L.: Blockchain im Tourismus – Revolution zwischen Hype und Hoffnung, 22 February 2018 (2018). https://www.netzvitamine.de/blog/blockchain.html. Accessed 14 Nov 2019
Nicolaisen, C.: Liechtenstein verabschiedet Blockchain-Gesetz (2019). https://www.dasinvestment.com/weltweite-premiere-liechtenstein-verabschiedet-blockchain-gesetz/. Accessed 15 Nov 2019
Orcutt, M.: Stablecoins will help cryptocurrencies achieve world domination – If they actually work, 27 September 2019 (2018). https://www.technologyreview.com/s/612207/stablecoins-will-help-cryptocurrencies-achieve-world-domination-if-they-actually-work/. Accessed 11 Nov 2019
Orcutt, M.: Bitcoin surveillance helped feds take down a massive child abuse site, 16 October 2019 (2019a). https://www.technologyreview.com/f/614578/bitcoin-surveillance-helped-feds-take-down-a-massive-child-porn-site/?utm_source=newsletters&utm_medium=email&utm_campaign=chain_letter.unpaid.engagement. Accessed 14 Nov 2019
Orcutt, M.: Chain Letter – Blockchains, cryptocurrencies, and why they matter, 14 November 2019 (2019b). [received via e-mail]. Accessed 14 Nov 2019
Orcutt, M.: Should central banks issue a digital currency? Suddenly, it’s an urgent question, 3 October 2019 (2019c). https://www.technologyreview.com/s/614472/should-central-banks-issue-digital-currency-suddenly-its-an-urgent-question/ Accessed 11 Nov 2019
Pierce, A.: The Queen asks why no one saw the credit crunch coming, 5 November 2008 (2008). https://www.telegraph.co.uk/news/uknews/theroyalfamily/3386353/The-Queen-asks-why-no-one-saw-the-credit-crunch-coming.html. Accessed 13 Nov 2019
Pringle, R.: Robert Pringle’s viewpoint: looking for a game-changer for the financial system, 18 September 2013 (2013). https://www.centralbanking.com/central-banks/financial-stability/2295054/robert-pringles-viewpoint-looking-for-a-game-changer-for-the-financial-system. Accessed 15 Nov 2019
Reuters: China’s digital currency not seeking “full control” of individuals’ details – central bank official, 12 November 2019 (2019). https://in.reuters.com/article/china-markets-digital-currency/chinas-digital-currency-not-seeking-full-control-of-individuals-details-central-bank-official-idINKBN1XM0JA. Accessed 14 Nov 2019
Rouse, M.: Electronic funds transfer (EFT) (2019). https://searchwindowsserver.techtarget.com/definition/Electronic-Funds-Transfer-EFT. Accessed 13 Nov 2019
Schatsky, D., Arora, A., Dongre, A.: Blockchain and the five vectors of progress, 28 September 2018 (2018). https://www2.deloitte.com/us/en/insights/focus/signals-for-strategists/value-of-blockchain-applications-interoperability.html. Accessed 11 Nov 2019
Schatsky, D., Muraskin, C.: Beyond bitcoin, 7 December 2015 (2015). https://www2.deloitte.com/us/en/insights/focus/signals-for-strategists/trends-blockchain-bitcoin-security-transparency.html. Accessed 13 Nov 2019
Schmid, J.D., Schmid, A.: Bitcoin – Eine Einführung in die Funktionsweise sowie eine Auslegeordnung und erste Analyse möglicher rechtlicher Fragestellung. Jusletter, 4 June 2012 (2012). https://www.epartners.ch/assets/images/publications/1338882576_Bitcoin.pdf. Accessed 26 Nov 2019
Schroeder, J.L.: Bitcoin and the uniform commercial code, Yeshiva University, Cardozo School of Law, Cardozo Legal Studies Research Paper No. 458, 22 August 2015 (2015). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2649441. Accessed 25 Nov 2019
Sergi, B.S., Teichmann, F.: Compliance in Multinational Corporations – Business Risks in Bribery, Money Laundering, Terrorism Financing and Sanctions. Emerald Publishing, Bingley (2018)
Stoeferle, R.P., Valek, M.J.: Gold and the turning of the monetary tides – in gold we trust report, Incrementum AG, 29 May 2018 (2018). https://ingoldwetrust.report/reports-archive/in-gold-we-trust-2018/. Accessed 13 Nov 2019
Stoeferle, R.P., Valek, M.J.: Gold in the age of eroding trust – in gold we trust report, Incrementum AG, 28 May 2019 (2019). https://ingoldwetrust.report/wp-content/uploads/2019/05/In-Gold-We-Trust-2019-Extended-Version-english.pdf. Accessed 13 Nov 2019
Suberg, W.: Argentina sets new trading record after central bank bans Bitcoin buys (2019a). https://cointelegraph.com/news/argentina-sets-new-trading-record-after-central-bank-bans-bitcoin-buys. Accessed 11 Nov 2019
Suberg, W.: Bitcoin trading spikes as Argentina bans buying more than $200 a month (2019b). https://cointelegraph.com/news/bitcoin-trading-spikes-as-argentina-bans-buying-more-than-200-a-month. Accessed 11 Nov 2019
Teichmann, F.: Anti-Bribery Compliance Incentives. Kassel University Press, Kassel (2017)
The Financial Crisis Inquiry Commission. The Financial Crisis Inquiry Report, final report of the National Commission on the Causes of the Financial and Economic Crisis in the United States, 25 February 2011 (2011). https://www.govinfo.gov/app/details/GPO-FCIC. Accessed 26 Nov 2019
White, W.: Is monetary policy a science? The interaction of theory and practice over the last 50 years. Working paper No. 155, Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute (2013). https://www.dallasfed.org/~/media/documents/institute/wpapers/2013/0155.pdf. Accessed 15 Nov 2019
Zhong, R.: China’s cryptocurrency plan has a powerful partner: Big brother, 18 October 2019 (2019). https://www.nytimes.com/2019/10/18/technology/china-cryptocurrency-facebook-libra.html?searchResultPosition=11. Accessed 14 Nov 2019
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this paper
Cite this paper
Teichmann, F., Falker, MC. (2020). Blockchain Technology and Cryptocurrencies: An Alternative to Central Banking?. In: Popkova, E., Sergi, B. (eds) Scientific and Technical Revolution: Yesterday, Today and Tomorrow. ISC 2019. Lecture Notes in Networks and Systems, vol 129. Springer, Cham. https://doi.org/10.1007/978-3-030-47945-9_164
Download citation
DOI: https://doi.org/10.1007/978-3-030-47945-9_164
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-47944-2
Online ISBN: 978-3-030-47945-9
eBook Packages: Intelligent Technologies and RoboticsIntelligent Technologies and Robotics (R0)