Cryptocurrency monetary policy refers to the mechanisms used to manage the supply and circulation of cryptocurrencies. These mechanisms are designed to ensure sustainability and stability.
Unlike conventional fiat currencies, which are controlled by central banks and governments, cryptocurrencies use decentralised protocols. These protocols can contain a number of tools to regulate the supply of cryptocurrency, including rewards for block, changes in mining complexity and issuance rates.
Who controls bitcoin's monetary policy?
Similarly, BTC is controlled by rules embedded in the bitcoin software protocol, which is open-source and decentralised. The rules of the protocol determine how new BTC are created and allocated over time.
One of the main components of Bitcoin's monetary policy is its constant supply, which works to maintain deficit and prevent inflation. Moreover, any proposed changes to the protocol must be approved by the majority of the network's users, making Bitcoin's monetary policy subject to consensus of users.
