Money evolves over time. Successive innovations, from coins to banknotes, cheques, credit cards, online banking and mobile payments, have made spending more convenient and secure.
While the form that money takes has changed, none of these innovations have fundamentally changed the relationship between the issuers of money, central banks, and households. Central banks remain monopoly suppliers of currencies, managed through commercial banks. The banks, in turn, provide accounts, transaction services and access to credit and cash for households.
Today technology has the potential to change these relationships in ways that weaken the power of central banks.
Cryptocurrencies, such as Bitcoin or Ethereum, pose the most obvious threat. Yet fluctuating values mean that cryptocurrencies are today mainly used for speculation, rather than transactions.
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