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    Tugas 1

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    The rise of decentralized digital currencies could impact the traditional functions of central banks such as controlling inflation, regulating banking, and ensuring stability. Adoption and regulations will determine the extent of this impact, as central banks may lose control over payments and face challenges influencing currency values. Emerging decentralized finance also reduces reliance on traditional banks overseen by central banks.

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    Tugas 1

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    The rise of decentralized digital currencies could impact the traditional functions of central banks such as controlling inflation, regulating banking, and ensuring stability. Adoption and regulations will determine the extent of this impact, as central banks may lose control over payments and face challenges influencing currency values. Emerging decentralized finance also reduces reliance on traditional banks overseen by central banks.

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    The rise of decentralized digital currencies could impact the traditional functions of central banks such as controlling inflation, regulating banking, and ensuring stability. Adoption and regulations will determine the extent of this impact, as central banks may lose control over payments and face challenges influencing currency values. Emerging decentralized finance also reduces reliance on traditional banks overseen by central banks.

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    467 views3 pages

    Tugas 1

    Uploaded by

    dikafa
    The rise of decentralized digital currencies could impact the traditional functions of central banks such as controlling inflation, regulating banking, and ensuring stability. Adoption and regulations will determine the extent of this impact, as central banks may lose control over payments and face challenges influencing currency values. Emerging decentralized finance also reduces reliance on traditional banks overseen by central banks.

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    TUGAS TUTON 1

    BAHASA INGGRIS NIAGA

    DEWI PUSPITA SARI

    (048360375)

    PROGRAM STUDI MANAJEMEN

    FAKULTAS EKONOMI

    UNIVERSITAS TERBUKA

    2024
    Please choose one of the topics below. Then, write an essay consisting of 3 paragraph. Elaborate
    your own opinion with the references related to the topic that you choose.

    1. With the increasing interest in and adoption of cryptocurrencies, some argue that
    the role of central banks could diminish in the future. How might the rise of
    decentralized digital currencies impact the traditional functions of central banks,
    such as controlling inflation, regulating the banking sector, and ensuring financial
    stability? Explain your reasoning.

    Answer

    The rise of decentralized digital currencies has the impact to the traditional role of central banks.
    Mass adoption by the public is key in determining the extent to which decentralized digital
    currencies can shift the role of central banks. The more people use digital currencies as their
    primary means of payment, the more likely it is that central banks will lose control over the
    payment and money circulation system. In addition, regulation will also play an important role in
    determining the role of central banks in the future. If regulations allow and even support the use
    of decentralized digital currencies, then central banks may need to adapt to the change.

    In controlling inflation, central banks usually use monetary policy to regulate money supply and
    interest rates. However, with decentralized digital currencies, central banks may face challenges
    in controlling money supply due to their lack of direct involvement in the distribution of such
    digital currencies. For example, Bitcoin, as one of the decentralized digital currencies, is not
    controlled by a single entity such as a central bank, making it difficult for central banks to
    influence the value or supply of Bitcoin directly. Moreover, in regulating the banking sector,
    central banks usually have a role in supervising and regulating commercial banks to ensure the
    stability of the financial system.

    However, with the development of blockchain technology that supports decentralized digital
    currencies, the emergence of more decentralized financial systems such as DeFi (Decentralized
    Finance) has reduced reliance on traditional banks. This can reduce the role of central banks in
    regulating the banking sector, as more financial activity can occur outside of their control. Also,
    the stability of the value of digital currencies will also affect the role of central banks. If
    decentralized digital currencies experience high volatility, central banks may still have a role in
    providing a more stable and reliable currency for the public. However, if decentralized digital
    currencies can achieve sufficient value stability, then central banks may face further pressure to
    maintain their relevance.
    The rise of decentralized digital currencies is having a major impact on the traditional role of
    central banks. Although central banks still have a vital role in monetary policy and financial
    stability, they will have to adjust their strategies to meet the challenges of increasingly
    decentralized financial technology developments.

    Reference

    Siti Era Mardiani. (2023). Bahasa Inggris Niaga. Tangerang Selatan: Universitas Terbuka.

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