National crypto-currency concept art: central bank evolving into digital currency exchange.

Crypto-Currency Revolution: Can a National Digital Currency Solve Economic Instability?

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Mira Elwood in Business & Economy June 2025 • 4 min read.

"Explore the potential of a national crypto-currency to combat inflation, enhance financial stability, and align with Islamic finance principles."


The global financial landscape is constantly evolving, with crypto-currencies emerging as a potential disruptor to traditional monetary systems. While private crypto-currencies like Bitcoin and Ethereum have gained traction, their volatility and regulatory challenges raise questions about their suitability as widespread mediums of exchange. This has led to increasing interest in the concept of a national crypto-currency, issued and regulated by a central bank or monetary authority.

This article delves into the framework for developing a national crypto-currency, exploring its potential benefits, challenges, and implications for economic stability, monetary policy, and financial inclusion. It also explores how such a currency could be designed to align with Islamic finance principles, offering a unique perspective on ethical and sustainable financial systems.

The underlying aim is to evaluate whether embracing digital currencies will combat inflation, protect against monetary devaluation and enhance financial stability in the modern economic climate.

The Case for a National Crypto-Currency

National crypto-currency concept art: central bank evolving into digital currency exchange.

Fiat currencies, the dominant form of money in the modern world, have faced increasing scrutiny due to their tendency to depreciate over time. This decline in purchasing power, driven by inflation and expansionary monetary policies, erodes the wealth of individuals and businesses. A national crypto-currency, designed with inherent safeguards against inflation, could offer a more stable and reliable store of value.

A national crypto-currency could also enhance financial stability by providing a more transparent and efficient payment system. Blockchain technology, the foundation of most crypto-currencies, enables secure and auditable transactions, reducing the risk of fraud and corruption. Additionally, a central bank-issued crypto-currency could streamline payment processes, lowering transaction costs and promoting greater financial inclusion.

  • Enhanced Monetary Policy: A national crypto-currency would provide central banks with new tools to implement monetary policy, potentially improving their ability to manage inflation and stimulate economic growth.
  • Reduced Transaction Costs: Digital transactions can be significantly cheaper than traditional payment methods, benefiting both consumers and businesses.
  • Financial Inclusion: Crypto-currencies can provide access to financial services for individuals who are excluded from the traditional banking system.
  • Increased Transparency: Blockchain technology provides a transparent and auditable record of all transactions.
From an Islamic finance perspective, a national crypto-currency could be designed to comply with Shari'ah principles. This could involve backing the currency with tangible assets, such as gold or a basket of commodities, ensuring its intrinsic value and preventing speculative activities. Additionally, the currency could be programmed to automatically allocate a portion of each transaction to charitable causes, promoting social responsibility and wealth redistribution.

The Future of Money: A Call for Innovation and Collaboration

The development of a national crypto-currency is a complex undertaking, requiring careful consideration of technological, economic, and regulatory factors. However, the potential benefits of such a currency are significant, offering a path towards greater economic stability, financial inclusion, and ethical financial systems. By embracing innovation and fostering collaboration between governments, central banks, and the tech community, we can unlock the transformative potential of digital currencies and build a more prosperous and equitable future for all.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.5539/ijef.v10n9p14, Alternate LINK

Title: A Framework For The Development Of A National Crypto-Currency

Subject: Energy Engineering and Power Technology

Journal: International Journal of Economics and Finance

Publisher: Canadian Center of Science and Education

Authors: Adam Abdullah, Rizal Mohd Nor

Published: 2018-08-08

Everything You Need To Know

1

What is a national crypto-currency?

A national crypto-currency is a digital form of money issued and regulated by a central bank or monetary authority. Unlike private crypto-currencies such as Bitcoin and Ethereum, which are decentralized and often volatile, a national crypto-currency aims to offer stability and be a reliable store of value, combating inflation and monetary devaluation.

2

How could a national crypto-currency enhance financial stability?

A national crypto-currency could enhance financial stability through a more transparent and efficient payment system built on Blockchain technology. This technology ensures secure and auditable transactions, reducing the risk of fraud and corruption. Furthermore, it can streamline payment processes, lower transaction costs, and promote greater financial inclusion by providing access to financial services for those excluded from traditional banking.

3

What are the implications of a national crypto-currency for monetary policy?

The implications of a national crypto-currency on monetary policy are significant. Central banks could gain new tools to manage inflation and stimulate economic growth. This offers the possibility of increased transparency in financial operations, potentially reducing the need for expansionary monetary policies, which can erode wealth. Furthermore, digital transactions facilitated by a national crypto-currency can be cheaper than traditional payment methods, benefitting consumers and businesses.

4

How might a national crypto-currency align with Islamic finance principles?

From an Islamic finance perspective, a national crypto-currency could align with Shari'ah principles by being backed by tangible assets like gold or a basket of commodities. This provides intrinsic value and prevents speculative activities. Moreover, the currency could be designed to allocate a portion of each transaction to charitable causes, promoting social responsibility and wealth redistribution within the financial system.

5

What is needed to develop a national crypto-currency?

The development of a national crypto-currency involves careful consideration of technology, economic aspects, and regulations. The potential benefits include greater economic stability, financial inclusion, and ethical financial systems. Collaboration between governments, central banks, and the tech community is crucial to unlock the transformative potential of digital currencies and build a more prosperous future. This calls for innovation in the form of a national crypto-currency.

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