Just passing along this nice piece from the Bank of England on Bitcoin and its role in the monetary system. A lot of this stuff jibes nicely with Monetary Realism. Here’s a short summary:
- The article discusses the reality that the monetary system is essentially already an endogenous system in which we all can issue money, but banks dominate the system with their issuance of the primary form of money, bank deposits.
- The banking system is constructed around the Central Bank as the bank where interbank payment clearing occurs.
- The Bank of England is skeptical about the ability of Bitcoin to serve as a competing form of money without the same components that have been addressed by modern banks.
If you’ve read most of my thoughts on Bitcoin I don’t think that much of this will be new to you, but it’s an interesting read for the uninitiated. Read it here.