According to ARCA, cryptocurrency “does not currently fully perform any of the functions of money” as the exchange rate volatility is too high — comparable with the volatility of food prices — to allow it to be efficient as payment.
The report also notes that the use of crypto “does not yet reduce transaction costs in the economy” due to its “energy inefficiency […] lack of economies of scale in the provision of cybersecurity [and] the low speed of entries in the register [blockchain]:”
“All of these factors lower the value of the potential advantage, which is the reduction in the number of intermediaries in settlements (of banks).”
ARCA writes that a comparison of crypto with fiat currencies with “their own intrinsic value” highlights how cryptocurrency’s market value is “formed mainly on expectations of investors’ readiness to sell it in the future at a higher price.”
The factors that could increase the use of cryptocurrency, according to ARCA, including the “toughening of sanctions against the backdrop of growing foreign policy and external economic tensions.” […]