Cryptocurrencies: Policy, Economics and Fairness

Systemic Risk Centre Discussion Paper 86, 2018

33 Pages Posted: 7 Nov 2018 Last revised: 15 Jul 2019

See all articles by Jon Danielsson

Jon Danielsson

London School of Economics - Systemic Risk Centre

Date Written: July 14, 2019

Abstract

Cryptocurrencies promise to replace fiat money with private money underpinned by algorithms, not government guarantees. While the technology is elegant, the success and failure of cryptocurrencies in the competition with fiat will not be determined by technology alone. It is more important to avoid serious economic and social consequences, and a cryptocurrency based monetary system would suffer from persistent price volatility and high systemic risk and would exasperate inequality.

Keywords: cryptocurrencies, systemic risk, money

JEL Classification: G00, G01, E42

Suggested Citation

Danielsson, Jon, Cryptocurrencies: Policy, Economics and Fairness (July 14, 2019). Systemic Risk Centre Discussion Paper 86, 2018. Available at SSRN: https://ssrn.com/abstract=3276606 or http://dx.doi.org/10.2139/ssrn.3276606

Jon Danielsson (Contact Author)

London School of Economics - Systemic Risk Centre ( email )

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