Tobias Adrian, Tommaso Mancini-Griffoli, 09 September 2019

New entrants are vying to occupy the space once used by paper bills. This column, part of the VoxEU debate on the future of digital money, proposes a simple framework to make sense of who is attempting to pry our wallets open. It argues that the adoption of new digital means of payment could be rapid and bring significant benefits to customers and society, but that the risks must be tackled with innovative approaches and heightened collaboration across borders and sectors. One approach is for central banks to engage in a public–private partnership with fintech firms to provide a safe, liquid, and digital alternative to cash: synthetic central bank digital currency.

Stephen Cecchetti, Antonio Fatás, 29 August 2019

The announcement of the launch of Libra, a private global cryptocurrency, has reignited the debate on the costs and benefits of digital forms of payments controlled by the private sector. This column introduces a new Vox debate on the future of digital money intended to foster a conversation among academics and policymakers about the costs and benefits of some of these innovations and future scenarios for digital money.

Siddharth Bhambhwani, Stefanos Delikouras, George Korniotis, 24 August 2019

We do not know which characteristics affect cryptocurrency prices, if any. The column argues that there are two fundamental factors that drive prices in the long run: the trustworthiness of the cryptocurrency’s blockchain and the adoption of the blockchain. Cryptocurrencies such as Bitcoin, Ethereum, and Monero are affected by these fundamentals. In some periods prices deviate, but eventually retrace the trend.

Lucrezia Reichlin, 31 July 2019

Lucrezia Reichlin looks to a future where new cryptocurrency technologies will be used for payment systems, but the money behind them will remain a monopoly of the central banks.

Markus K Brunnermeier, Harold James, Jean-Pierre Landau, 03 July 2019

Thanks to digitalisation, we now can hold money on our mobile phones and transfer wealth in real time to almost every corner of the world. Currencies can be swapped within milliseconds on smart phones and people can hold many currencies simultaneously in digital wallets. This column considers how digitalisation will affect the international monetary system, arguing that a new kind of currency area will emerge, held together by digital interconnectedness. These digital currency areas will cut across borders, increase currency competition and, in the process, may redefine the international monetary system.

Antonio Fatás, Beatrice Weder di Mauro, 26 March 2019

We should not expect a high correlation between ICO tokens and the price of Bitcoin or Ethereum given that they have very different business cases. This column demonstrates that this was indeed the case during 2007, but the moment the Bitcoin/Ethereum bubble burst, the correlation with ICOs increased and it remained high even when prices had stabilised. This may have been because the ICO market is still in its infancy and needs to mature, or it may indicate that ICOs were just one of the children of the hype and are likely to share the fate of major cryptocurrencies.

Marlene Amstad, 21 March 2019

Two events have shaped the financial system over the past ten years: the Global Crisis and the rise of fintech. But while the lessons learned after the crisis have been widely discussed and the regulatory response broadly agreed upon, the question of whether and how to regulate fintech is a topic of an ongoing policy debate. This column discusses the three basic options that regulators have: ignore it, ‘duck type’ rules into existing regulations, or specifically tailor new regulations.

Raphael Auer, 08 March 2019

Bitcoin and related cryptocurrencies are exchanged via simple technical protocols for communication between participants, as well as a publicly shared ledger of transactions known as a blockchain. This column discusses research on how cryptocurrencies verify that payments are final, that is, that they are irreversible once written into the blockchain. It points to the high costs of achieving such finality via ‘proof-of-work’ and to a crucial externality in the transaction market, and argues that with the current technology, the liquidity of cryptocurrencies is set to shrink dramatically in the years to come.

Sayuri Shirai, 06 March 2019

Recent years have seen the emergence of digital currencies such as Bitcoin as potential private sector money. Central banks are also considering whether to issue their own digital tokens to enable decentralised verification of transactions while maintaining attractive cash-like features. This column lays out the four existing proposals for implementing central bank digital currency. Due largely to technical constraints, however, central banks in general have not found a compelling reason to issue their own digital currency.

, 22 October 2018

Blockchain technology has a real potential to be a catalyst in the world of finance, offering new ways to intermediate capital risk and incite change in the financial sector. That's what the audience heard at a CEPR conference held at ING's London headquarters. But how much of this new technology is really understood? And is there a danger that hype is overshadowing reality?

Michael Casey, Jonah Crane, Gary Gensler, Simon Johnson, Neha Narula, 16 July 2018

The idea of a new software system that powers a consensus-driven form of shared record keeping has already had a profound effect, encouraging rapid and substantial investment in what is now commonly referred to as blockchain technology. This column introduces the latest Geneva Report on the World Economy, which assesses the available evidence and likely impact for this technology across a wide range of applications and explores the potential use cases for the financial sector, and the ways in which the organisation of these activities may change over time.

Simon Johnson, 16 July 2018

Blockchain technology has the potential to be a catalyst for change to incumbent financial sector firms. In this Vox Talk, Tim Phillips talks to Simon Johnson, one of the authors of the latest Geneva Report on the World Economy which looks at the technology and its possible applications. 

Beatrice Weder di Mauro, 06 July 2018

Central banks are concerned about the impact of cryptocurrencies. In this Vox Talk, Tim Phillips talks to Beatrice Weder di Mauro about the sources of this concern, and whether the disappearance of cash and a desire to escape the zero lower bound will lead to central banks issuing their own digital currencies.   

Stephen Cecchetti, 25 June 2018

Though central banks do not seem concerned about being driven obsolete by cryptocurrencies, some are considering issuing digital currencies with similar technology. Stephen Cecchetti discusses three policy implications this might have, namely for restricting the illegal use of cash, allowing for negative interest rates, and improving financial access. All three are possible, but come with risk.

Jon Danielsson, 13 February 2018

Cryptocurrencies are supposedly a new and superior form of money and investments – the way of the future. The author of this column, however, does not see the point of cryptocurrencies, finding them no better than existing fiat money or good investments.

Neil Gandal, JT Hamrick, Tyler Moore, Tali Oberman, 22 June 2017

The cryptocurrency Bitcoin has attracted widespread interest, in large part due to wild swings in its valuation. This column considers an earlier rise in the Bitcoin price to investigate what is driving the currency’s price spikes. The 2013 rise was caused by fraudulent trades taking place at the largest Bitcoin currency exchange at the time. This finding has implications for policymakers as they weigh what, if anything, to do about regulating cryptocurrencies in light of the record high Bitcoin valuation that many fear is a bubble.

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