Which Digital Currency is Best Fit for Purpose?

10 Pages Posted: 6 Nov 2014 Last revised: 9 Nov 2014

See all articles by Shann Turnbull

Shann Turnbull

International Institute for Self-Governance; Sustainable Money Working Group; New Garden City Alliance

Date Written: November 1, 2014

Abstract

This paper is based on a public submission to the Australian Senate Committee “Inquiry into Digital Currency” announced on October 2, 2014. The committee is to report to Parliament in March 2015. A framework is established that identifies ten reasons why digital Australian dollars are not fit for purpose as a medium of exchange and unit of account/value. To provide a reference unit of value to compare Bitcoins and the other types of crypto and digital currencies, a hypothetical negative interest-rate tethered currency described as $Z is introduced. Twenty benefits of accepting $Z are identified to support their introduction as a supplementary official currency and a more attractive alternative to Bitcoins in the event of another financial crisis. The paper recommends that regulators accept $Z like currencies and for the government to establish the technology to collect taxes and issue $Z like money through mobile phones to finance welfare and infrastructure without increasing debt or taxes.

Keywords: Bitcoins, Cell phone money, Digital Money, Negative Interest, Tethered currency

JEL Classification: D39, D46, E49, E52, G01, N22, N24

Suggested Citation

Turnbull, Shann, Which Digital Currency is Best Fit for Purpose? (November 1, 2014). Available at SSRN: https://ssrn.com/abstract=2518020 or http://dx.doi.org/10.2139/ssrn.2518020

Shann Turnbull (Contact Author)

International Institute for Self-Governance ( email )

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