Abstract:

This study aims to fill an important gap in the literature by evaluating cryptocurrencies as an application of free banking theory, which is a very radical theory in the economics literature. Free banking theory was tried in the 1990s with electronic money (e-money) with the opportunities provided by technology. However, the crypto money system is a healthier and more up-to-date application of free banking theory than e-money. Cryptocurrencies perform the functions of money better than e-moneys. In order to understand the theory of free banking within the scope of the study, the intervention forms and results of central monetary authorities in money markets were evaluated. Accordingly, the intervention of the central authorities in the fund markets with low interest and cheap loans is not different from the intervention in any sector. One of the biggest obstacles to the use of cryptocurrencies is legal uncertainties. Cryptocurrencies still have not become a currency that can compete with central monetary authorities. In order for cryptocurrencies and national currencies to compete, it is a necessary condition for the cryptocurrencies to be successful as well as the failure of the central monetary authorities. Within the scope of the study, the past, present, and future of cryptocurrencies were interpreted from the perspective of free banking theory.

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