Money's Past is Fintech's Future: Wildcat Crypto, the Digital Dollar, and Citizen Central Banking

Forthcoming in 2 Stanford Journal of Blockchain Law & Policy __ (2019).

Cornell Legal Studies Research Paper No. 19-05

12 Pages Posted: 11 Dec 2018 Last revised: 20 Mar 2019

Date Written: December 11, 2018

Abstract

I argue that crypto-currencies will soon go the way of the ‘wildcat’ banknotes of the mid-19th century. As central banks worldwide upgrade their payments systems, the Fed will begin issuing a ‘digital dollar’ that leaves no licit function for what I call ‘wildcat crypto.’ But the imminent change heralds far more than a shakeout in ‘fintech.’ It will also make possible a new era of what I call ‘Citizen Central Banking.’ The Fed will administer a national system of what I call ‘Citizen Accounts.’ This will not only end the problem of the ‘unbanked,’ it also will simplify monetary policy. Instead of working through private bank ‘middlemen’ that it hopes will lend QE money to borrowers during a downturn, the Fed will be able to do ‘helicopter drops’ directly into Fed Citizen Accounts. And rather than rely solely on interbank lending rate hikes or countercyclical capital buffering during periods of froth, the Fed will be able to impound money through the more ‘carrot-like’ measure of interest credited to those accounts. We are at last on the verge of establishing a true ‘Fed for the People.’

Keywords: Banking, Bitcoin, Blockchain, Central Banking, Citizen Central Banking, Crypto-Currency, Currency, Digital Currency, Digital Technology, Distributed Ledger, Federal Reserve, Fiat Currency, Finance Franchise, Financial Inclusion, Fintech, 'Free Banking,' Money, 'Stablecoin,' Wildcat Banking

JEL Classification: E

Suggested Citation

Hockett, Robert C., Money's Past is Fintech's Future: Wildcat Crypto, the Digital Dollar, and Citizen Central Banking (December 11, 2018). Forthcoming in 2 Stanford Journal of Blockchain Law & Policy __ (2019).; Cornell Legal Studies Research Paper No. 19-05. Available at SSRN: https://ssrn.com/abstract=3299555 or http://dx.doi.org/10.2139/ssrn.3299555

Robert C. Hockett (Contact Author)

Cornell University - Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
152
rank
190,199
Abstract Views
726
PlumX Metrics