Kee Youn Kang is an assistant professor at the Department of Finance, School of Business, Yonsei University. He received his Ph.D. in economics from Washington University in St. Louis in 2017. His research interests are Macro and monetary economics, Banking and Finance, Search Theory, Game Theory. He is planning to give a talk about one of his research related to Cryptocurrency and institutional Monetary Policy. His other works are Counterfeiting, Screening, and Government Policy and Central Bank Purchases of Private Assets, which are also closely related to institutional economics.

We develop a general equilibrium model of cryptocurrency to study the optimal design of the cryptocurrency system. Agents trade the cryptocurrency using digital wallets and the cryptocurrency system provides a way to verify the history of double spending attempts of digital wallets. Delaying delivery of goods until payment information is confirmed in the blockchain prevents double spending. However, double spending can be prevented without delivery lags if a wallet has a good reputation about the history of double spending attempts under some conditions. In particular, as the difficulty of mining work rises, double spending incentives with a good wallet decreases. We study the optimal design of cryptocurrency in terms of the difficulty of mining work and the supply of cryptocurrency, and evaluate the welfare gain in the current Bitcoin system from adopting the optimal cryptocurrency system.