Title
Money's Past is Fintech's Future: Wildcat Crypto, the Digital Dollar, and Citizen Central Banking
Document Type
Article
Publication Date
6-2019
Keywords
Bitcoin, Blockchain, Crypto-Currency, Digital Currency, Fintech
Disciplines
Banking and Finance Law | Internet Law
Abstract
This Essay argues that crypto-currencies will soon go the way of the ‘wildcat’ banknotes of the mid-19th century. As central banks worldwide upgrade their payments systems, the Fed will begin issuing a ‘digital dollar’ that leaves no licit function for what the Author calls ‘wildcat crypto.’ But the imminent change heralds more than a shakeout in fintech. It will also make possible a new era of what the Author calls ‘Citizen Central Banking.’ The Fed will administer a national system of ‘Citizen Accounts.’ This will not only end the problem of the ‘unbanked,’ it will also simplify monetary policy. Instead of working through private bank ‘middlemen’ that it hopes will pass QE to borrowers during downturns, the Fed will be able to make ‘helicopter drops’ directly into Fed Citizen Accounts. And rather than relying solely on interbank lending rate hikes or on countercyclical capital buffering during periods of monetary excess, the Fed will be able to impound money through the more carrot-like measure of interest payments it credits to those accounts. Fintech utopians are right that our money is changing, but wrong about what change will look like. It will look like a digital dollar administered by a ‘Citizens’ Fed.’
Recommended Citation
Hockett, Robert C., "Money's Past is Fintech's Future: Wildcat Crypto, the Digital Dollar, and Citizen Central Banking," 2 Stanford Journal of Blockchain Law & Policy (2019)