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Cryptocurrencies: A Crash Course in Digital Monetary Economics

Jesus Fernandez-Villaverde ()

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: This paper reviews what cryptocurrencies are, and it frames them within the context of historical monetary experiences and contemporary monetary economics. The paper argues that, as pure duciary private money, cryptocurrencies are a bubble without a fundamental value and that they will not provide, in general, optimal amounts of money or deliver price stability. Nevertheless, cryptocurrencies can play a role in improving the current means of payments and in disciplining central banks into providing better government-run duciary monies.

Keywords: Private money; currency competition; cryptocurrencies; monetary policy (search for similar items in EconPapers)
JEL-codes: E40 E42 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon, nep-pay and nep-pke
Date: 2018-09-03, Revised 2018-09-03
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:18-023

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