Volatility in virtual currencies will not deter usage – new research

Collaborative paper explores the effect of exchange rate on usage of cryptocurrency

As virtual currencies gain in popularity, their exchange rates will become less volatile, a working paper published by the Bank of Canada has suggested.

Authors Wilko Bolt from the Netherlands Bank and Maarten van Oordt from the Bank of Canada explore factors that influence digital currency exchange rates, constructing a model to decipher how a virtual currency responds to changes in the speculative position of investors.

"The model predicts that, as virtual currency becomes more established, th