Digital Currency Time

Why are we talking about digital currency now? Because it’s digital currency time.

Steam engines were known about in ancient Greece but were used as toys. The raw materials for steam engines (iron, coal and so forth) were widely available to many civilisations around the world. The need for mechanical work to increase productivity must have been evident from time immemorial. So why did steam engines for commercial use arise in England at a particular point in history, as an inefficient and energy-intensive way to get water out of mines? Well, there are all sorts of complicated explanations to do with the availability of capital, the transition from a feudal economy, the proximity of supply and demand and so on and so forth.

In a way though it is simple and sufficient to say that steam engines arose not because of any single factor but because of their coincidence. We got steam engines because it was steam engine time.

When I first began discussing digital currency a couple of decade ago, I knew that the way that money works is a temporary institutional arrangement and Ie knew that it must change in response to technology, businesses and societial change. But when would it change and what would it change to? Fiat currencies managed by central banks are only one way to organise the world and there are others. Yet our discussions about new ways to organise the financial system may have seemed to some observers a trifle speculative, to say the least. Well, they were. As I explain in my book The Currency Cold War,  the then governor of the Bank of England Mark Carney gave a speech last autumn in which he said that a new form of global digital currency could be “the answer to the destabilising dominance of the US dollar in today’s global monetary system”.

So that's why we are talking about digital currency. Not because technologists like me are talking about it or because entrepreneurs are talking about or because policy wonks are talking about but because central bankers are not only talking about it, but (as in China, for example) starting to roll it out.

It's digital currency time.