Are Cryptocurrencies a More Equitable Form of Money?

40 Pages Posted: 22 Apr 2019

See all articles by John Vaz

John Vaz

Monash University; Financial Research Network (FIRN)

Kym Brown

Monash Business School, Monash University; Financial Research Network (FIRN)

Date Written: March 22, 2019

Abstract

The governance of the fiat money system via democratically elected government and financial institutions aims to ensure that all can transact fairly and safely with confidence in the stability and viability of that system in an equitable manner for all citizens. Rawls (1971) suggested that the principle of “equal liberty” and “fair equality of opportunity” was important to the achievement of the common interest. But the global crisis of 2008 brought into question the fairness of capitalism utilising fiat money. Cryptocurrencies have been proposed as an alternative form of money motivated on the basis of giving users greater fairness and equity than existing fiat money. This paper considers these claims with an analysis that demonstrates that in practice cryptocurrencies are more susceptible to the ‘tragedy of the commons’ due to governance problems and contradictions of claimed benefits. We apply the theoretic framework of Elinor Ostrom (2005) and suggest ways to improve fairness by addressing governance issues to ensure that more equitable objectives are achieved.

Keywords: cryptocurrencies, money, ethics of money

JEL Classification: E42, E40, B53

Suggested Citation

Vaz, John and Brown, Kym, Are Cryptocurrencies a More Equitable Form of Money? (March 22, 2019). Available at SSRN: https://ssrn.com/abstract=3358670 or http://dx.doi.org/10.2139/ssrn.3358670

John Vaz

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Kym Brown (Contact Author)

Monash Business School, Monash University ( email )

P.O. Box 197
Caulfield East, Victoria 3800
Australia
61 3 9903 1053 (Phone)
61 3 9903 2422 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: www.firn.org.au

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