 Should We Resuscitate Currency Competition?Livio Stracca ()
Chapter Chapter 5 in Redefining the Monetary Standard in the Digital Age, 2025, pp 115-128 from Springer Abstract: Abstract The chapter revisits Friedrich Hayek’s proposal for currency competition as outlined decades ago in his book “The Denationalisation of Money”, a concept which has been brought back to the fore again with the rise of cryptocurrencies. Although Hayek is not the “prophet of cryptocurrencies”, he did suggest allowing different currencies to compete rather than having government-issued fiat money as the default. Hayek’s proposal emerged from his frustration with government control over currency and inflation. However, his ideas faced criticism even from mainstream economists like Milton Friedman and Anna Schwartz, who questioned the practicality and stability of competing currencies. Concerns included legal challenges, lack of trust, and potential regulatory issues. Critics argued that Hayek underestimated the role of government in managing market failure. The chapter also mentions the historical context of free banking systems and the resurgence of interest in Hayek’s ideas with the rise of cryptocurrencies. Ultimately, the feasibility of Hayek’s vision remains debated. Keywords: Currency competition; Hayek; Fiat money; Regulation; Cryptocurrencies (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-89840-2_5 Ordering information: This item can be ordered from DOI: 10.1007/978-3-031-89840-2_5 Access Statistics for this chapter More chapters in Springer Books from Springer |
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