Central Bank Digital Currency vs. Crypto currency: A Comparative Study on Regulation, Stability, and Financial Inclusion”

The combined descriptive and correlation analyses together present a clear picture of the highly uneven and concentrated nature of the cryptocurrency market. A few major players, especially Bitcoin, dominate market capitalisation, unit price, and trading volume, which is responsible for skewing the overall averages. Wide ranges and high standard deviations across all variables confirm the volatility and disparities in the sector. The correlation analysis backs up these findings and provides evidence that market capitalisation is very much related to both unit price and trading volume. This implies that cryptocurrencies of higher value not only have a more significant portion of the market but also get the most trading activity.  On the other hand, circulating supply has a weak negative relationship with value and liquidity, which means that scarcity is more closely associated with higher prices and stronger market presence than abundance. The study, therefore, concludes that the cryptocurrency markets are primarily driven by the value concentration, investor preference for expensive coins, and liquidity in the dominant coins, rather than by the total number of tokens in circulation. This brings out the speculative and unequal nature of the market, as a small group of assets sets the trends for the whole market, and investors as well as policymakers have to face both opportunities and risks.

·        Podder, Bhaskar, has provided a fascinating regulatory perspective on the topic of “Cryptocurrency and Central Bank Digital Currency.” This article was published in the International Journal of Financial Studies, Economics and Management, Volume 2, Issue 3, in the Year 2023, covering the pages from 25 to 35. ResearchGate ·         ScienceDirect has published a paper titled “Central bank digital currency and cryptocurrency in emerging markets,” which will be available in 2024. ScienceDirect ·        The year 2023 saw the International Review of Financial Analysis tackle the topic of central bank digital currencies with an article entitled "A Critical Review," which is accessible on ScienceDirect ·         The question of whether central bank digital currency can lead to greater financial inclusion is currently being debated. ScienceDirect ·          Peterson K. Ozili has examined the interrelationship of CBDC, Fintech, and cryptocurrency in the context of financial inclusion and financial stability. • Banks in different parts of the world show a similarity in that the central bank digital currencies have a positive effect on financial stability. The evidence comes from the global banking sector. ·         The International Monetary Fund (IMF) has published a Working Paper in 2024 titled “Central Bank Digital Currencies and Financial Stability: Balance Sheet Analysis and Policy Choices.” — This paper provides a detailed balance-sheet analysis of CBDC issuance and the implications thereof for banking-sector stability and macroprudential responses. IMF ·         The Bank for International Settlements (BIS) conducted a survey on central bank digital currencies and published the results in 2021. Among others, the survey reveals banking CBDC activity and discusses potential risks to banks' funding, lending, and resilience. It can be particularly useful for cross-country design comparisons and stability analysis. Bank for International Settlements+1 ·         • The Financial Stability Board (2024) has come out with the G20 Crypto-Asset Policy Implementation Roadmap (FSB report). — This report discusses the global regulatory priorities for crypto-assets and outlines the policy steps required to alleviate the concerns regarding financial stability and consumer protection. It is beneficial in the context of the “regulation” aspect of the crypto vs CBDC debate. Financial Stability BoardWorld Bank. ·         Tan, B. J. (2024). Central bank digital currency and financial inclusion (Journal article). — Theoretical/modeling study on CBDC designs' influence on inclusion outcomes and possible trade-offs with bank intermediation. Helpful for empirical modeling or theory sections. ScienceDirect