Impacts of Digital Currency on the UK Financial System

This dissertation explores the impact of digital currency on the UK financial system. It discusses the concept of digital currency, its role in finance and accounting, and its impact on organizations. The research findings suggest that digital currency simplifies the record of transactions and helps management make effective decisions. It also allows organizations to access investment returns and opportunities. The dissertation recommends implementing anti-money laundering regulations to overcome challenges like cyber security and data breaches.

Project 2 Individual Dissertation
Executive Summary
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Title: Impacts of digital currency On the UK financial system.......................................................3
Introduction......................................................................................................................................3
Research aim:.........................................................................................................................3
Research Objectives:..............................................................................................................3
Research Questions:...............................................................................................................3
Discussion and summation of the research findings........................................................................3
Reflection on the dissertation process and a recommendation on how to do the dissertation
differently in the future....................................................................................................................9
References......................................................................................................................................12
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Title: Impacts of digital currency On the UK financial system
Introduction
Digital currency is defined as a payment system that only exists in electronic format and which is
not tangible. Furthermore it has been underlined the digital currency can be duly transfer among
entities for users with the help of taking advantage of technology like Internet. smartphone and
computers. It has been analysed that digital currency effectively allow borderless transaction of
ownership in an effective manner (Andolfatto, 2021). It benefits organizations and individuals to
conduct transaction in an easy and faster manner. Research analysed that digital currency can be
used to purchase services as well as goods in effective manner. Furthermore it has been
underlined that in today’s time period digital currency is playing key essential role as most of the
organisations like Tesco is performing their roles and responsibilities on international market
segment which provides them to conduct transactions. Virtual currency and crypto currency are
some of the certain examples of digital currency. In modern business environment digital
currency is playing important role which enable seamless transfer of value and can make
organization to conduct transaction in a cheaper manner in modern business time in order to
assure successful accomplishment of business objectives on international platform. It is essential
for organization to accept both physical and digital currencies in effective manner this will
significantly aid them to conduct operations effectively with the help of easy faster and seamless
transfer of funds. Furthermore, it has been underlined that digital currency also allow in
organization to manage and control currencies and effective manner. In addition to this has been
underlined the digital currency is having direct impact on accounting system as well as finance
of an organization. iI also plays important role for financial system of a country present research
explores the impact of digital currency on the United Kingdom financial system.
In today’s modern world digital currency acts as a medium of exchange which helps in
storing and transferring money on electronically format. This is not typically associated with
physical form like notes and coins of traditional currency (Auer and Böhme, 2020). It is essential
for organization to adopt their roles and responsibilities with the fast changing business world.
Digital currency is playing essential role in today’s modern business world as it allows
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organizations to expand their scope of growth and opportunities through which they can access
long term growth and sustainability. Furthermore, it has been underlined that with the help of
undertaking use of digital currency companies like Tesco can assure various advantages digital
currency is playing crucial role for financial system in the United Kingdom. It allow them to
have secure transactions as digital currencies are mainly empowered by blockchain technology.
In addition to this with the help of undertaking use of this technique digital currency organization
can have decentralized and autonomous form of transaction which is mainly managed by central
governing body. This is playing important role for United Kingdom financial system as it allow
organization to conduct fast payment which increases strong financial system. It also helps in
having peer to peer transaction and which required no 3rd party digital currencies fees are peer to
peer which needs minimal fees. This allow organization to assure more profitability while
managing their currency system in effective manner. In today’s business environment it is
essential for organization to conduct low transaction fees system with a fast and easy payment
option as it provide them opportunities for growth and acquiring business deals in more effective
manner. Digital currency provide fast transit and transfer time and does not need physical
manufacturing. In this with the help of undertaking use of this form of currency business
organisations can assure higher growth and profitability. The Present study effectively explored
the impact of digital currency on the United Kingdom system and executive analysis of research
and objectives questions along with the discussion and simulation of research finding is being
undertaken in present study. Along with this reflection on the dissertation process along with
recommendation to how to do the dissertation differently in future is also being discussed in
effective manner.
Research aim:
“To analyse the impact of digital currency on finance and accounting of an organisation”.
Research Objectives:
 To know about the concept of digital currency.
 To analyse the role digital currency in finance and accounting of an organisation.
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 To determine the impact of digital currency on the finance and accounting of an
organisation.
Research Questions:
 What is the concept of digital currency?
 What is the role of digital currency in the finance and accounting of an organisation?
 What is the impact of digital currency on the finance and accounting of an organisation?
Discussion and summation of the research findings
Discussion and summation of research findings through primary data collection method
Digital currency is a type which is available only in electronic format with an aim to
conduct transaction. The present research study include in depth discussion on the theoretical
presentation while focusing on the concept of digital currency. It has been analysed in present
research states that digital currency defined as a form of exchange which operates in an
independent manner via electronic devices in modern time. There are various forms of uses that
can be duly undertaken into consideration by companies to effectively coordinate with the
present requirements (Auer and Böhme, 2021). There are various forms of benefits that
companies can gain with the help of digital currency. Research identifies that the primary
advantage of this is to pay attention on use of digital currency with a virtual existence in an
effective manner. In context with present research investigator has undertaken the use of
quantitative research in the primary reason behind taking advantage of this is to collect data in
numerical and systematic manner. This provided research and ability to conduct in depth
analysis of the selected topic and undertake better decision. Furthermore in order to accomplish
the research on the topic of impact of digital currency on the UK financial system that has been
analysed that investigator with the help of quantitative research study obtained effective
conclusion. While in terms with research philosophy method of analysis investigator undertaken
positivism research philosophy to effectively draw valid conclusion of the impact of digital
currency on UK financial system. With the help of undertaking this research investigator obtain
information in a systematic manner. Furthermore in context with research approach investigator
has selected the use of deductive research approach. The primary reason behind taking
advantage of this is to align information with quantitative research method. Furthermore it has
been underlined that with the help of undertaking use of both primary and secondary source of
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data collection methods, in this investigator effectively reviewed article, journal, books, library
and past conducted research work to analyse the impact of digital currency on the UK financial
system. From these methods investigator drawn out the fact that digital currency is playing
essential an important role for UK financial system which is providing number of advantages to
organization to conduct roles and responsibilities in effective manner. While in terms with the
help of taking advantage of primary data in which investigator with the help of questionnaire
analysed viewpoint of various respondents. In this investigator has selected 20 respondents in
which most of the respondents were aware with the term of digital currency. Furthermore,
maximum number of respondents said that digital currency is playing important role on UK
financial system. It simplifies the record of the transaction. Furthermore according to the analysis
respondents with the help of primary research methods in which investigator has undertaken the
use of questionnaires, maximum number of respondents said that digital currency have positive
impact on UK financial system. Furthermore respondents also said that faster payment is one of
the most sector benefit of digital currency on the UK financial system. According to these
respondent viewpoint as per the primary data collection analysis it has been identified that these
respondents said that with the help of undertaking use of digital currency business organization is
having advantage of conducting their payment in a faster manner. While some respondents said
that there is a greater transparency and other respondent said that with confidentiality it is
providing safety and security on UK financial system. In addition to this according to the
primary data collection analysis it has been identified that most of the respondents said that the
major challenge that has been faced by UK financial system due to digital currency is related to
account and data breaches. Respondents also said that there are different types of digital currency
such as bitcoin etc. which provide organization advantage to conduct digital transactions in an
effective manner.
From the primary data analysis and investigator has undertaken the use of questionnaire it
has been analysed that digital currency is playing important and key essential role on the UK
financial system, as it provides organizations and individuals to simplify the record of transaction
and help management to undertake effective decision. It also allows them to access the
investment return and many other opportunities. Furthermore as per the analysis of various
respondents with the help of primary data collection method it has been analysed that digital
currency is providing organization an advantage to record transaction which is playing key
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essential role to maintain robust financial system. In addition to this it has been underlined the
digital currency is mainly a form of currency which is however available in electronic as well as
digital format. Furthermore, it has been analysed that digital currency is also defined as
electronic money and is only accessible with computers and mobile phones and exist in
electronic format. From the primary analysis it has been also justified that digital currency is
playing important role in place modern business environment which allows organization to
conduct transactions in easy and faster manner. With the help of this currency the United
Kingdom financial system is measuring the advantage of production in the settlement risk. This
also allowing to conduct transaction on a real time basis. With the help of this currency business
organization is having an advantage of purchase goods and pay for services in easy manner
(Bindseil, 2019). By analysing the primary data collection method in which most of the
respondents provided suggestion in terms of the statement that digital currency is playing
essential role for the United Kingdom financial system. But simplifying the records of
transaction is key role of digital currency upon UK financial system. Digital currency is the type
of currency which is available only in electronic and digital form. In addition to this, it is also
known as electronic money that is only accessible with mobile phones or computers as it only
exists in electronic form. In addition to this, it has been also identified that. Also, The firm also
invests in the digital medium of the currency which assists the enterprise in accessing the
investment return by including it in the financial statement. Evaluating, helps the management to
take appropriate decisions. These are implied by the medium of central banks. It simplifies the
records of the transactions which are done through the technology. Additionally, The various
impact of digital currency on UK financial system are fluctuations in prices, unstable system and
so on. digital currency has direct impact on and for this it is vital for companies to maintain a
record of every transaction so that it can manage funds properly. Digital currency is not volatile,
it changes rapidly. This leads to the fluctuation in the prices and is an issue for the companies
who invest in these types of currencies. It is an unstable system. It leads to a decrease in the
value of other digital currencies, and the companies have suffered losses due to this. This is a
form of currency which is available on digital and electronic format which provides challenges
and benefits on same basis. In this most of the respondents stated that it is essential for
organizations in the United Kingdom to implement and team money laundering regulations in
exchange of digital currency. This will not only help UK financial system to protect themselves
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from any malware and hacking but also allow them to prevent from criminal cases. Thus from
the analysis of collect primary data collection method in which researchers with the help of
questionnaire evaluated viewpoint of respondents in which investigator undertaking the use of
random sampling size method and asked certain questions from respondents it has been analysed
and digital currency is playing important role for the United Kingdom financial system. In this,
most of the respondents agreed with the fact that digital currency is having positive impact on the
financial system of the United Kingdom and they are playing important role in terms of
simplifying the record of transactions from the analysis of the state of collection method it has
been stated that in order to overcome the challenges like cyber security, attack account and data
breaches etc. It is essential for organizations to undertake the use of anti-money laundering
regulations and implement all the essential rules and security methods. This will significantly
help them to undertake the use of digital currencies for long term growth and profitability along
with easy transaction methods.
Discussion and summation of research findings through secondary data collection method
In context with discussion and summation of research finding that has been conducted by
researchers with the help of undertaking the use of secondary data collection tools in methods in
which investigator undertaken the advantage of conducting in depth analysis of past research
findings and analysis of journal, article, books, library and already conducted research work
investigator has presented in the literature review, it has been analysed that digital currency is a
type of currency which is available on electronic format. In this as per the viewpoint of Auer and
Böhme (2021) digital currency defined as a form of exchange which mainly operates in an
independent manner via electronic devices. Furthermore from the analysis of data and
information presented in the secondary source of the present research it has been evaluated that,
there are various forms of uses off digital currency that organization can undertake with an aim
to coordinate with prevailing requirement. Furthermore it has been also been analysed that there
are various forms of benefits that can be duly obtained with the help of digital currency, it also
organization to conduct transactions in an easy and safer manner and this does not collapse at a
single point of failure. Furthermore as per it has been analysed by a researcher with the help of
secondary data collection method that digital currency is a type of transaction that is basically
based on the network which is distributed across larger number of computers. According to
Smikle (2022) Digital Currency (DC) are transacted by using electronic medium which is
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helpful in gaining the significant situation which avoids counter. It helps in gaining accurate and
fair functioning in turn taking decision in proper manner become possible. On the basis of this it
can be mentioned that there are several areas in which taking fair decision based on gaining
proper information that is complied with international financial recording standards for ensuring
establishment of right obligation. In contrast to this, van Oorschot and et.al., 2022 articulated that
accounting for the digital currency is seemed to be little confusing due to having an effect of
avoidance of financial scrutiny by government for tax evasion. In addition to this, these are
referred as vulnerable to devaluation if taken into usage in connection n with illegal activities.
The direction given in respect to have proper guidance in managing and controlling the
operational activities in organization is sound to be confusing as pay attention on articulating that
this is not treated as currency for computing losses or profit. Fair market value is determined on
the basis of date on which it is acquired. However from the secondary research data analysis it
has been stated that there are number of lacking areas which is essential to be highlighted as to
gain the significant information and data in order to undertake the use of digital currency in an
effective manner.
As per the analysis of secondary data it has been evaluated that there are some certain
aspects which is important to be considered such as improper systematic procedure lack of
comprehensive regulation that can impact on the overall functioning of business. Furthermore
according to the analysis of secondary data that has been collected by researcher it has been
analysed according to the viewpoint of various authors that there are various form of important
these that organization can undertake to use digital currency. Furthermore, it has been evaluated
that there are various kinds of digital currencies that are essentially utilized by organizations in
regard to achieve objective of having higher proficiency and viability that incorporates Bitcoin,
digital money, and so forth. Each sort of the cash assume critical part in affecting the functional
practices. There are not many downsides which are required to have been accentuated in regard
to get the stage to defeat winning difficulties. This incorporates instability, nonappearance of
unofficial laws, irreversible and restricted use (Ward and Rochemont, 2019). From the
assessment, it tends to be indicated that there are number of clients who are ignorant about the
predominant situation thusly going through with exchange successfully doesn't become
conceivable. There are larger number of targets like having huge working, more noteworthy
proficient cycle, acquiring efficiency, and so on which probably won't be achieved because of the
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non suitable application because of absence of information. Furthermore, digital currency is
computerized presence of virtual cash plot that reflects worth of cash that is fundamentally
worked into explicit climate, as per the secondary analysis. This isn't given by the public
authority and oversaw and constrained by the designers which is acknowledged among the
individuals from explicit local area. There is presence of the mechanized issuance will be viewed
as basically advanced that have which different sorts of characters of financial worth. Based on
this, it tends to be referenced that idea of advanced money which expresses that there is
execution for advancing the credit only economy. However, as per the analysis of secondary
collected information it has been evaluated that some authors expressed that managing this can
be valuable yet have specific degree of entanglements that includes consistence with specific
guidelines in regard with oversee and comply prerequisites of this climate. There are sure
circumstances which has high energy utilization and prompts the crimes that hamper the
certainty of clients which influence the installment system. It tends to be determined that there
are number of benefits and weaknesses of utilizing computerized monetary forms. Furthermore,
as per the analysis of secondary data sources researcher identifies that digital currency is having
positive impact on the UK financial system (Kregel and Savona, 2020). In this various leading
organization like Tesco which is operating on global platform can utilise advantage of digital
currency to conduct international transaction in effective manner. From the viewpoint of various
authors it has been analyzed that digital currency is having important and positive impact which
allow leading companies as well as small scale companies to conduct cheaper and faster way to
enhance their productivity. From the analysis of secondary collected data and information by
researcher in which various authors, journals, articles, books has been in depth evaluated by
investigator it has been stated that digital currency helps organization to cope up with the
challenges presented in modern business environment. From the data collected with the help of
secondary data collection method it has been analyse that digital currency is providing
organization to overcome the challenges that they are facing and also allowing them to reduce
costs and assure higher efficiency with leading performance in the industry. However various
authors also stated the additional currency is having negative impact on organization
performance as it increases the risk of security breach. Investigator analysed from the books and
already conducted past research work that with the help of taking advantage of implementing
strong security system organization can overcome these challenges.
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Thus, according to the research findings with the of primary and secondary data method it
has been analysed the digital currency is providing a significant advantage to business
organizations (Pichler, Summer and Weber, 2019). However they need to emphasise on certain
measures and implements strong security system to overcome the challenges that can affect
overall profitability. With the help of taking use of digital currency in effective manner
companies like Tesco and other business organization can assure long term growth. This is
providing positive and greater impact on the UK financial system.
Reflection on the dissertation process and a recommendation on how to do the
dissertation differently in the future
The present research has been conducted by investigator on the title of the impact of digital
currency on the United Kingdom financial system. In this researcher effectively analyse data and
information associated to the selected topic with the help of primary and secondary data
collection method. In this with the help of secondary data collection method researcher
investigated that, digital currency plays important role for the United Kingdom financial system,
as it allow organization to conduct transaction in cost effective manner and easy and systematic
way. While from the primary data analysis it has been analysed that most of the respondents
were agreed with the fact that digital currency is having positive impact on United Kingdom
financial system, as it provides various benefits such as discreet and confidentiality, faster
payment system and more. In order to conduct this research both negative and positive
experience has been experienced by investigator. In this during the dissertation process
investigator face certain challenges for issues in terms of analysing and evaluating viewpoint of
respondents, as investigator has selected overall 20 respondents the help of random sampling
method of different financial organizations. In this during the process of conducting research
analysis with the help of quantitative data analysis investigator selected to take use of statistics
numerical format in which with the help of questionnaire viewpoint of respondents has been
journalised. During this process investigator face challenges in terms of maintaining strong
communication ties with respondents. Along with this it has been underlined that researcher also
faced significant challenges in terms of taking appropriate perception of respondents. Along with
this there were some respondents who showed no interest and with this further lead towards
wastage of time which affected the overall research outcome of research. It has been analysed
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that with the help of strong communication and critical thinking scale investigator generalised
respondents viewpoint in a well defined and effective manner. Along with this with the help of
effective persuasive skill investigator encourage respondents to present correct and accurate
perception in order to fulfill research in a valid manner. During the process of undertaking
viewpoint of various respondents investigator face challenges in terms of management of time.
However in this with the help of staying align with the deadline and taking use of time
management scale investigator accomplished this research in an effective manner.
Furthermore it has been analysed that present research provided positive experience to
researcher in terms of enhancing current level of knowledge in skill in a well defined and
effective manner, as the present research has been conducted on the title of the impact of digital
currency on the United Kingdom financial system. In this it has been analysed by researcher that
doing this dissertation enhanced the overall knowledge and skill associated to the concept of
digital currency. Furthermore with the help of doing this dissertation investigator developed
various skills such as communication, time management, data analysis and data collection skill
and undertaking research in proper time etc. With the help of these skills investigated developed
the current level of proficiency in a well defined and effective manner. Furthermore it has been
underlined that during this dissertation investigator undertaken the perception of various
respondents which helps in developing communication skills of investigator in effective manner.
This research played important role for investigator in efficient way as it develop personal and
professional skills and competencies of investigator. It also developed researcher ability to
conduct future research in a well defined and effective manner. Thus it has been analysed at this
research provided both negative and positive experiences. During the dissertation process
investigator has gone through number of challenges and issues which played significant role in
developing competencies and ability to overcome future challenges in effective manner. This
research also helps in developing some certain professional and personal skill of investigator
which develop the researcher ability to undertake future research in an appropriate way with the
help of different skills.
The present research has been conducted by investigator with the help of taking
advantage of positivism research philosophy. Along with this researcher undertaking the use of
deductive research approach and collected data and information with the help of primary in
secondary source of data collection method (Carney, 2019). In this in terms with primary data
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collection method investigator undertaking the use of survey and questionnaire and further
collected information with the help of journalising respondents viewpoint while in terms with
secondary data collection method investigator gone through many articles, books, journals,
library and other sources to identify the impact of digital currency on the financial system of the
United Kingdom. In this it is recommended to conduct future research with the help of taking
use of qualitative data collection method in this investigator can undertake use of interview
method to accumulate information in an effective manner. With the help of this method
investigator can assure accurate screening and gain undertake face to face interview that helps in
analysing the actual reaction of respondents. It also help investigators to find the right candidate
and conduct detailed assessment and get sources of information and also helps in enhancing
currently level of knowledge. Furthermore, in order to conduct future research with the help of
this method investigator can conduct research in a different manner. Thus it is recommended to
investigator to emphasise on undertaking use of this method to accomplish research objective as
it will significantly benefit them to have better response rate and can also generalise individual
mindset in an effective manner with assuring more data and greater clarity. Furthermore. it has
been underline that it is recommended to researcher to undertake advantage of interview method,
as it will allow them to assure to have detailed information about respondent perception and
opinions.
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References
Books and Journals
Andolfatto, D., 2021. Assessing the impact of central bank digital currency on private banks. The
Economic Journal. 131(634). pp.525-540.
Auer, R. and Böhme, R., 2020. The technology of retail central bank digital currency. BIS
Quarterly Review, March.
Auer, R. and Böhme, R., 2021. Central bank digital currency: the quest for minimally invasive
technology (No. 948). Bank for International Settlements.
Boar, C., Holden, H. and Wadsworth, A., 2020. Impending arrival–a sequel to the survey on
central bank digital currency. BIS paper, (107).
Bindseil, U., 2019. Central bank digital currency: Financial system implications and
control. International Journal of Political Economy, 48(4), pp.303-335.
Bindseil, U., 2020. Tiered CBDC and the financial system. Available at SSRN 3513422.
Kregel, J.A. and Savona, P., 2020. The impact of technological innovations on money and
financial markets (No. 150). Public Policy Brief.
Nabilou, H., 2019. Central bank digital currencies: Preliminary legal observations. Journal of
Banking Regulation.
Pichler, P., Summer, M. and Weber, B., 2019. Does digitalization require central bank digital
currencies for the general public. OeNB Monetary Policy & The Economy Q, 4, pp.40-56.
Viñuela, C., Sapena, J. and Wandosell, G., 2020. The future of money and the central bank
digital currency dilemma. Sustainability, 12(22), p.9697.
Ward, O. and Rochemont, S., 2019. Understanding Central Bank Digital Currencies
(CBDC). Institute and Faculty of Actuaries.
Carney, M., 2019, August. The growing challenges for monetary policy in the current
international monetary and financial system. In Remarks at the Jackson Hole
Symposium (Vol. 23).
Náñez Alonso, S.L., Echarte Fernández, M.Á., Sanz Bas, D. and Kaczmarek, J., 2020. Reasons
fostering or discouraging the implementation of central bank-backed digital currency: A
review. Economies, 8(2), p.41.
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