Digital Currencies, Decentralized Ledgers, and the Future of Central Banking

Peter Conti-Brown & Rosa Lastra (eds.), Research Handbook on Central Banking, Edward Elgar Publishing, Spring 2017, Forthcoming

19 Pages Posted: 4 May 2016  

Max Raskin

New York University School of Law

David Yermack

New York University (NYU) - Stern School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2016

Abstract

Central banking in an age of digital currencies is a fast-developing topic in monetary economics. Algorithmic digital currencies such as bitcoin appear to be viable competitors to central bank fiat currency, and their presence in the marketplace may pressure central banks to pursue tighter monetary policy. More interestingly, the blockchain technology behind digital currencies has the potential to improve central banks’ payment and clearing operations, and possibly to serve as a platform from which central banks might launch their own digital currencies. A sovereign digital currency could have profound implications for the banking system, narrowing the relationship between citizens and central banks and removing the need for the public to keep deposits in fractional reserve commercial banks. Debates over the wisdom of these policies have led to a revival of interest in classical monetary economics.

Keywords: Central banks, digital currency, blockchains

JEL Classification: E58

Suggested Citation

Raskin, Max and Yermack, David, Digital Currencies, Decentralized Ledgers, and the Future of Central Banking (May 1, 2016). Peter Conti-Brown & Rosa Lastra (eds.), Research Handbook on Central Banking, Edward Elgar Publishing, Spring 2017, Forthcoming . Available at SSRN: https://ssrn.com/abstract=2773973

Max Raskin

New York University School of Law ( email )

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New York, NY 10012-1099
United States

David Yermack (Contact Author)

New York University (NYU) - Stern School of Business ( email )

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Suite 9-160
New York, NY 10012-1126
United States
212-998-0357 (Phone)
212-995-4220 (Fax)

HOME PAGE: http://www.stern.nyu.edu/~dyermack

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