For centuries, there was no doubt about the need for a medium that, without the vicissitudes of the collection effort, fills the pockets of governments. Let us remember that, by exceeding the technically responsible volume of currency in circulation, the states penetrate the pockets of citizens, causing their patrimony to be diminished, without there being any means of defense or opposition that they can oppose. The currency allows the ruler to transfer wealth to the public sector.
Cryptocurrencies, except in the case of China, have challenged that old and powerful monopoly. The RMB of the Asian giant deserves special and extensive analysis, since it represents the vanguard position in digital money, to which we will dedicate later comment.
In the first instance, we must say that, like the promissory notes and bills of exchange of the Middle Ages, these figures that represent value affect and alter the value of monetary aggregates, generating a multiplier effect of exchange means that central banks or monetary authorities should take into account. The capacity of the new instrument to acquire goods and services, maintaining a constant volume when the amount to be issued was calculated, necessarily alters prices, and will eventually influence inflation.
On the other hand, there are several challenges for the authorities, since, like medieval instruments, whoever traffics with them does so trusting, by commercial reference, in the generator or issuer, since their value depends on demand. It is not an asset with intrinsic value, nor does it represent a backed equity or balance sheet. There is no rating or assessment of the support capacity, therefore, as happened centuries ago, the entire system is supported by a fiduciary axis, as strong or as fragile as the conviction of continuity and permanence that resides in the holders.
That’s right, as new as it may seem, in its essence, the idea or concept is not so new, technology was only applied to an ancient concept that finds advantages in the creation of a substitute for money, escaping control, traceability and other characteristics and restrictions typical of a medium created exclusively by the State.