The SWIFT Institute recently announced new research which “assesses whether the global financial community is accepting Bitcoin as a valid currency.” The research is based on a working paper first published in February 2015, “Virtual Currencies: Media of Exchange or Speculative Asset.”
The paper has since been revised, and was republished last June. The research was conducted by; Dr. Dirk G. Baur from UWA Business School, Dr. KiHoon Hong from Hongik University College of Business and Dr. Adrian D. Lee from the University of Technology Sydney.
The authors examine the relationship between digital currencies, primarily bitcoin, and fiat currencies. They evaluate any “immediate risks that virtual currencies pose to monetary, financial or economic stability,” according to the announcement.
“Contrary to conventional wisdom, our research shows that fiat currencies crowd out Bitcoin, not the reverse, and that the design and size of the Bitcoin market deprives the currency of its intended use as a medium of exchange.”
– KiHoon Hong, Hongik University College of Business
The SWIFT report is not the first to assert that the size of the bitcoin market hampers its use as a medium of