Cryptocurrencies and the Evolution of Banking, Money, and Payments

Abstract

Abstract This chapter discusses cryptocurrencies in the context of a historical overview of the evolution of money, banking, and the payment system. The chapter is organized as follows. Section I introduces the topic. Section II addresses money, payment, and payment intermediation. Section III sets out the evolution of commercial banking to facilitate national and global networks for book-based payments. Section IV addresses both electronic banking as a form of payment intermediation and the availability to the public of central bank balances as a challenge to payment intermediation. Section V examines the challenge cryptocurrencies present to state-issued currency, payment intermediation, and the roles of banks in the payment systems. The conclusion points at an irony: even as a challenge to banking, cryptocurrencies emerged as an outgrowth of an enhancement to banking.