Can Bitcoin Become Money? The Monetary Rule Problem

10 Pages Posted: 19 Mar 2020

See all articles by Nicolas Cachanosky

Nicolas Cachanosky

Metropolitan State University of Denver; American Institute for Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: December 2019


The growing literature on Bitcoin can be divided into two groups. One performs an economic analysis of Bitcoin focusing on its monetary characteristics. The other one takes a financial look at the price of Bitcoin. Interestingly, both of these groups have not given much more than passing comments to the problem of whether or not Bitcoin has the right monetary rule in order to become a well‐established currency. This paper argues that Bitcoin in particular, and cryptocurrencies in general, do not have a good monetary rule and that this shortcoming seriously limits its prospect of becoming widely used money.

Keywords: Bitcoin, monetary rules, nominal income targeting

Suggested Citation

Cachanosky, Nicolas, Can Bitcoin Become Money? The Monetary Rule Problem (December 2019). Australian Economic Papers, Vol. 58, Issue 4, pp. 365-374, 2019, Available at SSRN: or

Nicolas Cachanosky (Contact Author)

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