Cryptocurrencies from an Austrian Perspective

58 Pages Posted: 12 Apr 2017 Last revised: 18 Apr 2017

Alistair Milne

Loughborough University - School of Business and Economics

Date Written: April 17, 2017


This paper outlines the technology of cryptocurrencies, avoiding misleading analogy with notes and coin. It then proposes using this technology to move both bank money and money-financed bank loans off balance sheet onto a single shared cryptocurrency ledger, together with government issued fiat money. This stops bank failures disrupting money and payments and hence helps achieve monetary outcomes desired by the Austrian school of economics: reducing excessive state interference in the market for credit (through bank regulation, lender of last resort and bail-out) and discouraging unsustainable money and credit expansions (leading to financial crisis and depression).

Keywords: 100-percent reserved banking, bank payments, bank reserves, Bitcoin, blockchain, central counterparties, the Chicago plan, clearing and settlement, credit money, cryptography, commodity money, digital currency, distributed ledgers, electronic currency, fiat money, fiduciary media

JEL Classification: B53, E42, G21

Suggested Citation

Milne, Alistair, Cryptocurrencies from an Austrian Perspective (April 17, 2017). Available at SSRN: or

Alistair K. L. Milne (Contact Author)

Loughborough University - School of Business and Economics ( email )

Epinal Way
Leicestershire, LE11 3TU
United Kingdom

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