Paper to be presented at the DRUID Society Conference 2014, CBS, Copenhagen, June 16-18 Digital Money: How Ready are Countries to Adopt? Llewellyn D. W. Thomas Imperial College London Imperial College Business School
[email protected] Antoine Vernet Imperial College London Imperial College Business School
[email protected] David M. Gann Imperial College London Imperial College Business School
[email protected] Abstract Digital money has been claimed to have the potential to provide major economic and social benefits, however there is little research into the readiness of countries to adopt digital money. Defined as 'currency exchange by electronic means', we conceptualize digital money as a socio-technical system, and propose a Digital Money Readiness Index. This composite index integrates institutional, financial, technological, economic, industrial and social attributes to measure how ready a country is to adopt digital money. We first outline the digital money system, detailing its interdependent components. We then detail our index construction methodology, listing the indicators selected, and the techniques of normalization, dealing with outliers, weighting, the ranking calculation and clustering techniques. We identify four stages of readiness, Incipient, Emerging, In-Transition and Materially Ready, as well as analyze the relationship of digital money readiness to measures of cashlessness. We conclude with a discussion and future directions. Jelcodes:E40,- DIGITAL MONEY: HOW READY ARE COUNTRIES TO ADOPT? ABSTRACT Digital money has been claimed to have the potential to provide major economic and social benefits, however there is little research into the readiness of countries to adopt digital money. Defined as “currency exchange by electronic means”, we conceptualize digital money as a socio- technical system, and propose a Digital Money Readiness Index.