Ferdinando Giugliano, Columnist

If Central Banks Issue Cash, They Can Issue Cryptocurrencies

Consumers want the anonymity that cash and digital currencies provide.

December 4, 2017 at 7:00 AM UTC

Ferdinando Giugliano is a former Bloomberg Opinion columnist. He was previously a member of the editorial board of the Financial Times.

Move over, cash; cryptocurrencies will be king.
Photographer: Nicholas Kamm/AFP/Getty Images

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Central banks and cryptocurrencies seem to come from different planets. While monetary authorities are the guardians of price and financial stability, the likes of bitcoin and ethereum have ignited a speculative frenzy mirroring the tulip mania of the 17th century.

Yet, from Singapore to Sweden, central bankers are taking a close interest in digital currencies. They are right to do so. The reason is not financial stability: the market for bitcoin, while growing, is not sufficiently interconnected to risk causing systemic effects. But the technology behind cryptocurrencies has an extraordinary potential and is one which monetary authorities should learn to master for the future.