Let the Market Come Up With Better Money Tech
Jim Dorn James A. Dorn is vice president for monetary studies at the Cato Institute Twenty-five years ago, in the dawn of electronic money, Federal Reserve Board Chairman Alan Greenspan presented a paper at the U.S. Treasury conference on “Electronic Money and Banking: The Role of Government,” where he argued that the future of e-cash will depend on the private sectors “flexibility to experiment, without broad interference by government.” The COVID-19 pandemic has hastened the transition from paper currency to e-cash. People still want cash, but increasingly in digital form stored on mobile wallets rather than in bill folds. China has already closed the door on private, market-based cryptocurrencies to protect the state‘s stake in creating a central bank digital currency (CBDC). There is little doubt that eventually all major central banks will create their own digital currencies. The question is whether governments will allow private digital currencies to emerge and compete with these official digital media of exchange, or follow in China’s footsteps by banning private, market-based substitutes. This article is part of Future of Money Week, a series exploring the varied (and sometimes weird) ways value will move in the future. James A. Dorn is vice president for monetary studies at the