The SWIFT Institute has announced it is launching a new research programme on digital currencies, with a €15,000 grant on offer for the author of the winning proposal.

The institute is looking for research on recent developments in digital currencies and cryptocurrencies, but places an emphasis on bitcoin, which it describes as "arguably the most popular" digital currency.

"With bitcoin’s increasing usage, virtual currencies are becoming more of a reality. There are bitcoin ATMs in more than 10 countries worldwide, and the currency is increasingly accepted by mainstream retailers," the SWIFT Institute says, in a call for proposals titled, 'Virtual Currencies: What are the “real” risks?’.

Peter Ware, director of the SWIFT Institute told CoinDesk:

In an overview of the subject, the institute points out that there are an average of 40,000-80,000 bitcoin transactions per day, adding that the volume is "expected to rise exponentially" as the currency gains acceptance.

The institute outlines a number of potential potential advantages and challenges associated with bitcoin and other cryptocurrencies that the research proposals will need to address:

The document also adds that the research proposals can be either theoretical or empirical in nature.

The institute requires all applicants to submit a CV or biography with all relevant information about the applicant, who is also required to submit a 2,500 word description of the research project. The deadline is August 20th 2014. The SWIFT institute told CoinDesk that it currently has a handful of proposals, but the institute typically receives proposals very close to the deadline.

The winning author will receive 50% of the grant immediately, while the remaining 50% will be paid out when the working paper is submitted.

Once the research is completed, the SWIFT Institute will make it available to the financial industry and it will be freely available to anyone who wishes to download it.

The SWIFT Institute is an offshoot of the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which effectively sets the standards for interbank digital transactions and currently works with more than 10,500 banks and other banking organisations.

The institute was founded in 2012 with the goal of researching the current operations and future needs of the global financial services system. Part of its job is to award grants to attract more academics to tackle industry challenges and explore new ideas.

Hat tip: Let's Talk Bitcoin.