Cryptocurrency integration: A blessing or a curse for economic development and stability?
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Purpose: To systematically review and synthesize existing empirical evidence on the multifaceted impacts of cryptocurrency integration on economic development and stability, aiming to determine whether its proliferation is predominantly beneficial or detrimental to sustainable economic systems. Methodology: A systematic literature review was conducted following the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines. The Scopus database was searched for empirical articles published between 2010 and 2024, focusing on keywords related to cryptocurrencies, economic development, economic growth, financial stability, financial risks, and financial inclusion. A multi-stage filtering process led to the inclusion of 21 relevant research articles. Results: The review reveals a predominant consensus (52.4% of reviewed articles) that cryptocurrency integration has a negative impact on economic growth and stability, primarily due to volatility, systemic risks, and its use in illicit activities. While some studies highlight potential for financial inclusion (e.g., SME financing) and as a hedge in specific contexts, the broader findings point to significant challenges for monetary policy, regulatory oversight, and conventional banking paradigms. The theoretical contribution: This study consolidates fragmented research into a coherent overview, highlighting the complex and often contradictory effects of cryptocurrencies. It contributes to understanding the challenges digital currencies pose to traditional economic theories and models of financial stability, particularly within the context of achieving sustainable development. Practical implications: The findings urge policymakers to develop robust, globally coordinated regulatory frameworks to mitigate systemic risks, combat financial crime, and protect consumers. Financial institutions must adapt their risk management strategies to accommodate digital assets. The study also highlights the importance of public financial literacy programs regarding cryptocurrency risks and advocates for considering the impacts of cryptocurrency in broader economic and sustainable development planning.
Sustainable Development Goals (SDGs): SDG 8: Decent Work and Economic Growth; SDG 9: Industry, Innovation and Infrastructure; SDG 10: Reduced Inequalities; SDG 16: Peace, Justice and Strong Institutions.
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This work (article) is licensed under a Creative Commons Attribution 4.0 International License.
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