Money, Banks and Finance in Economic Thought

AN OVERVIEW OF THEORETICAL INFLUENCES ON CRYPTOCURRENCIES

Lakomski-Laguerre Odile, CRIISEA, University of Picardie Jules Verne
Desmedt Ludovic, Université de Bourgogne-Franche-Comte

Bitcoin was conceived as a payment system: the protocol defined a unit of account, as well as a set of rules and procedures governing the issuing and transfer of monetary units and the security of transactions. The system was developed in the 2008 crisis’ wake: it is a payment instrument that seeks to be international, supported by disruptive technology and organized as a network. The original texts and most of the websites devoted to it refer primarily to Bitcoin’s role as “means of payment”: its goal is to define a new monetary space, thanks to computer networks that have been liberated from banking, regulatory, and fiscal burdens, among others. It thus constitutes a paradigm reversal vis-à-vis bank-created money and the way it is regulated, but it has nothing to do with other monetary alternatives, such as local and complementary currencies; the sociologist Nigel Dodd describes it as a “techno-utopia”. The original project was in fact a monetary protest, the roots of which lie in the world of anarchist cryptographers, who wanted to preserve individual freedom and protect private data through a currency that cannot be easily traced. The project closely resembles what Friedrich Hayek imagined in his 1976 book The Denationalization of Money, in which he envisioned the possibility of a founding a solid monetary order on the virtues of competition and the free market, with the (major) difference that, in Hayek’s scenario, banks would remain the issuers. But now, with the financialization of cryptocurrencies (derivatives, ICOs and so on), the relationship between the dimensions of means of payment and store of value is problematic and relates to what Michel Aglietta calls “the ambivalence of money”: a currency is a public good that ensures the proper functioning of payment systems, whereas finance relates to the valorization and private appropriation of wealth. Pathologies can emerge: the store-of-value dimension can subside (as with inflation), or it can dominate and “block” exchange (as with hoarding). If hoarding prevails, the financial dimension can threaten payments. In such cases, according to the German philosopher Georg Simmel, money is rendered “immobile.” The goal of this paper is to evaluate the cryptocurrencies by different theoretical angles: how hayekian, keynesian, institutionalist or sociologist approaches can enrich our vision of this « tehno utopia » ?

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Keywords: Bitcoin, cryptocurrencies, cypherpunk, techno utopia, liberalism