Key challenges of launching national cryptocurrencies using extended FMEA under uncertainty environment

Document Type : RESEARCH PAPER

Authors

1 MSC in Information Technology Engineering, Department of Information Technology, Faculty of Industrial Technologies, Urmia University Technology, Urmia, Iran

2 Associate Professor, Department of Information Technology, Faculty of Industrial Technologies, Urmia University Technology, Urmia, Iran

3 Associate Professor, Department of Industrial engineering, Faculty of industrial Technologies, Urmia University of Technology, Urmia, Iran

Abstract

This article rigorously examines the multifaceted obstacles and challenges associated with the implementation of national cryptocurrencies in developing countries, particularly focusing on both central bank digital currencies (CBDCs) and private sector cryptocurrencies. The emergence of cryptocurrencies presents both opportunities and risks for financial systems, particularly in regions where traditional banking infrastructure is limited. To systematically identify and prioritize these challenges, the authors employ a decision-making framework grounded in Failure Mode and Effects Analysis (FMEA). This analytical approach enables a comprehensive understanding of the potential risks and vulnerabilities that may hinder successful cryptocurrency adoption.

In a bid to enhance the precision of decision-making processes, the authors propose a novel methodology that combines Step-wise Weight Assessment Ratio Analysis (SWARA) and Weighted Aggregated Sum Product Assessment (WASPAS). This dual approach allows for improved evaluation and comparison of various challenges faced by stakeholders in implementing cryptocurrencies, yielding more nuanced insights into the decision-making landscape.

The study identifies several critical risks associated with CBDCs, including inadequate financial backing for stablecoins, inherent currency volatility, complexities stemming from centralized management, and the absence of a universally accepted ecosystem for transaction facilitation. On the other hand, significant challenges facing private-sector cryptocurrencies include the preservation of small-scale capital value and the essential consideration of data protection and privacy for users.

Overall, the findings underscore the need for comprehensive and well-informed strategies to mitigate these challenges. By addressing these obstacles, policymakers and stakeholders can navigate the complexities of cryptocurrency implementation more effectively, ultimately fostering financial inclusion, economic growth, and enhanced stability in developing economies.

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Main Subjects

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