Monetary policy’s cryptocurrency challenge
Central banks will eventually have to grapple with the powerful challenge that blockchain has thrown at the traditional monetary systems
The previous instalment of Cafe Economics focused on the fragile economics of bitcoin—and why its design makes it more a speculative financial asset rather than a stable monetary unit (see Bitcoins, gold standard and monetary stability, 20 December). The column ended as follows: “There are now growing signs that central banks are trying to figure out how to embrace the blockchain future. What will that mean for the money supply process as well as for monetary policy?"