Cryptocurrencies and Digital Fiat Currencies

Abstract Current generations of cryptocurrencies are not money, but future ones may be. While Bitcoin performs poorly as a store of value, it is actually on par with the Venezuelan bolívar over the last decade, and the Argentinian peso over the decade from 1986. I evaluate arguments in favour of central banks issuing digital fiat currency—intended to replace cash—and digital fiat money—intended to replace money more broadly. Digital fiat currency appears a natural step forward, but digital fiat money would be a bad idea as it makes the central bank responsible for the entire money supply.