What Will Central Banks Do When Tokens Replace Money?
They may still be able to run monetary policy — but after a messy transition.
What will central banks do when tokens replace money?
Photographer: Witthaya Prasongsin/Moment RF/Getty Images
With mainstream investment products increasingly finding a second home on the blockchain, it’s a good time to ask what role central banks would play if everything they have learned while policing double-entry bookkeeping over the last 350 years becomes irrelevant.
The techno-anarchist vision behind cryptocurrencies like Bitcoin was to free the financial wellbeing of individuals from the clutches of large custodial institutions — and the monetary mandarins supervising them. That utopia never materialized, but the embrace of the underlying technology by traditional banks and asset managers has taken off.