Proof of Stake Interest Money and Islam

The Covid-19 pandemic has resulted in the acceleration of the digitization and Internetization of various aspects of the business activities of companies and enterprises, Internet-implemented processes for the sale of products and services, Internet-implemented payments and settlements, Internet-implemented marketing communications with customers, and so on. Much earlier, in the 1990s, in some countries, the first companies began to develop their business activities, including the sale of certain products and/or services via the Internet, the first Internet businesses began to operate, Internet startups, dotcoms growing rapidly, portals offering Internet information services, earning money from the sale of Internet advertising, and so on. At that time, electronic banking was already developing rapidly, offering its banking services remotely, first to institutional clients, and then to individual clients, to citizens. Electronic banking initially providing remote banking services in the form of so-called home banking, and then at the turn of the century transformed into online banking and then into mobile banking. Successively, therefore, the electronification, digitization and Internetization of banking is progressing year by year. In some countries, as early as the late 1990s, there were already considerations about the future of Internet banking development. The possibility of a full transition of banking to online banking was considered, as well as the full replacement of money existing in traditional form, i.e. in the form of banknotes and coins, to the form of electronic money. Already at that time there were theories suggesting that soon, in a few years, all banking will become Internet banking, that physically existing bank branches will disappear completely, physically existing money will disappear from citizens' wallets and will be completely replaced by its electronic counterpart. A continuation of this kind of considerations is the transition of central banks to a kind of form of electronic central banking and the replacement of traditional money with digital currency generated and introduced into the economy by central banks within the framework of shaped monetary policy. In a situation where the progressive processes of digitization and internetization would also apply to central banking then monetary policy could also be subject to these processes. Well, during the Covid-19 pandemic, there was also an increased interest in the development of central bank digital currencies (CBDCs) in some countries. Some countries have attempted to introduce digital currencies of central banks. An interesting issue is the possibility of involving Blockchain technology in the development of systems based on central banks' digital currencies, which could ensure a high level of security for these digital currencies. However, both the positive aspects of the introduction of central banks' digital currencies for the formation of monetary policy, which would also be implemented more digitally, are still not fully recognized. The negative aspects of the introduction of financial systems and their development based on central banks' digital currencies are also not diagnosed. It is not fully explored what new risks in financial markets can be generated by the introduction of central banks' digital currencies. It is not known how the introduction of digital currencies of central banks could affect the stability of financial systems, the situation in financial markets and the macroeconomic stability of the economy as a whole.

I have described the key issues of the central banking problem in my articles below:

Synergy of post-2008 Anti-Crisis Policy of the Mild Monetary Policy of the Federal Reserve Bank and the European Central Bank