Features of an Economics with Cryptocurrencies

The diffusion of cryptocurrencies and the extensive use of the blockchain technology have triggered a significant change in the institutional structure of money and financial markets. The necessary re-regulation of this change is being delayed for at least three reasons: insufficient understanding of the phenomenon, the claim to protect the existing legal system and the depth of vested interests that have developed in defence of the virtual instrument. While still uncertain in its prospects, the institutional architecture of the security market (rules, institutions and policies) sees the emergence of a triple form of fiduciary money: traditional monetary base, Central Bank Digital Currency (CBDC) and private cryptocurrency (in its original and stable coin forms), the use of which affects the payment system and the management of credit and financial assets. Technology platforms that offer fast and less expensive custodian services, management and conversion services for virtual products have entered into competition with traditional banks and financial intermediaries. The financial supervisory authorities will have to adapt their supervision to the progressive transfer of the activity of the security markets into the infosphere. Monetary policy will have to take account of this new reality, as will fiscal policy, if they intend to pursue their goals. This paper identifies the main features of an economic theory that includes cryptocurrencies as a premise for a much needed regulation of virtual currencies aimed at preventing new instabilities in the markets.