Political economy of private cryptofinance. Technology and social relations

Abstract

Distributed ledger technology marks a significant evolution of bookkeeping based on immutable and shared databases in cyberspace. Within this technological framework, which is intertwined with specific social relations, privately issued cryptocurrencies have emerged in multiple forms. A key distinction lies between cryptocurrencies that have their own distributed ledger, which are usually decentralized, and those created on top of existing ones, which are always centralized. Drawing on Marxist theories of value and money, this paper analyzes them, positing the former type (native cryptocurrencies) as potential digital commodity money. Privately issued cryptocurrencies have already partially acquired the functions of money, except for that of monetary unit of account, which has only been achieved by stablecoins. Notably, the current US administration actively supports the creation and use of dollar-pegged stablecoins. At the same time, both state and non-state actors in the world market are increasingly employing privately issued cryptocurrencies in general for diverse purposes. These developments point to the emerging transformation of world money facilitated by distributed ledger technology.