Digital Currencies: Did Hayek have a case? I Interview George Selgin, Peter A. Fischer (NZZ)

Описание: Peter A. Fischer from NZZ is interviewing Professor George Selgin, Senior Fellow at the Cato Institute, who delivered a captivating presentation titled "Forward to the Past? Hayek, Free Banking, and the Cryptocurrency Revolution" at the XVII Gottfried von Haberler Conference on May 12th, 2023 in Vaduz, Liechtenstein.

Back in the mid-1970s Friedrich Hayek dared to suggest that, if given a chance, private firms would produce better monies than governments ever have. His sensational claim encouraged others to look into past private currency arrangements, and especially into former “free banking” systems in which currency mainly consisted of redeemable paper notes issued by competing commercial banks.

The possibility of private fiat-like money that Hayek envisioned was entirely hypothetical when he raised it. As for free banking systems, by then, they had almost all long since given way to government paper currency monopolies, with little prospect that any ordinary commercial bank would dare to enter the paper currency business again. Consequently, no actual examples of either sort of private currency existed for economists to study. Knowledge of them was either entirely theoretical or based on episodes in the long past.

The advent of cryptocurrency has changed this. In important respects, “free-floating” cryptocurrencies, like Bitcoin, resemble Hayek’s private fiat-like currencies. Redeemable stablecoins, on the other hand, resemble old-fashioned, redeemable banknotes in being circulating, bearer claims to some other sort of money. Consequently, instead of having to rely on theory alone or on evidence from the distant past, to understand the merits and drawbacks of private currencies, economists can now learn from some living examples.

In this essay, I first review Hayek’s proposals and the research on free banking they helped to inspire. I then consider the advent and record of cryptocurrencies, asking, among other questions, how closely they resemble either the private fiat-like currencies envisioned by Hayek or old-fashioned commercial banknotes, whether they appear likely to displace official currencies, and what their record suggests about their merits compared to those monies.