A blog on financial markets and their regulation
Daily Archives: November 29, 2016
November 29, 2016Posted by on
In two recent blog posts, I argued that the post-demonetisation problems in India are not due so much to an absence of cash, but an environment that is implicitly or explicitly discouraging the emergence of cash alternatives. Free markets can solve these problems if we let them do so.
Here are three examples of cash alternatives from three continents that I came across post demonetisation:
Bond notes in Zimbabwe: Though these notes are issued by a government, these count as cash substitutes because these bonds/notes are not issued by the government that issues the underlying currency.
Bitcoin in Venezuela (h/t FT Alphaville): Only a year ago, I was thinking that Bitcoin had failed as a currency while succeeding enormously as a technology (the blockchain), but state failures around the world have been so great that now I think we can no longer rule out Bitcoin emerging as a major global currency.