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The economics of digital currencies

Author

Listed:
  • Ali, Robleh

    () (Bank of England)

  • Barrdear, John

    () (Bank of England)

  • Clews, Roger

    () (Bank of England)

  • Southgate, James

    () (Bank of England)

Abstract

Although digital currencies could, in theory, serve as money for anybody with an internet-enabled device, at present they act as money only to a limited extent and only for relatively few people. The economics of the schemes as currently designed, both in terms of individuals’ incentives and at a macroeconomic level, pose significant challenges to their widespread adoption. Digital currencies do not currently pose a material risk to monetary or financial stability in the United Kingdom. The Bank continues to monitor developments in this area.

Suggested Citation

  • Ali, Robleh & Barrdear, John & Clews, Roger & Southgate, James, 2014. "The economics of digital currencies," Bank of England Quarterly Bulletin, Bank of England, vol. 54(3), pages 276-286.
  • Handle: RePEc:boe:qbullt:0148
    as

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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/the-economics-of-digital-currencies.pdf?la=en&hash=E9E56A61A6D71A97DC8535FEF211CC08C0F59B30
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    References listed on IDEAS

    as
    1. McLeay, Michael & Radia, Amar & Thomas, Ryland, 2014. "Money creation in the modern economy," Bank of England Quarterly Bulletin, Bank of England, vol. 54(1), pages 14-27.
    2. David Yermack, 2013. "Is Bitcoin a Real Currency? An economic appraisal," NBER Working Papers 19747, National Bureau of Economic Research, Inc.
    3. Murphy, Emma & Senior, Stephen, 2013. "Changes to the Bank of England," Bank of England Quarterly Bulletin, Bank of England, vol. 53(1), pages 20-28.
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