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George C. Georgiou, World Economics, March 2020
All national and international monetary structures have evolved to assist in the creation and management of sovereign fiat currencies. This sovereign currency status quo was suddenly upended with the arrival of the first cryptocurrency, Bitcoin, in 2008 which introduced a peer-to-peer digital fiat currency without the need of a central banking system, through a trustless, fungible and tamper-resistant distributed accounting system known as blockchain. The response to the threat posed by cryptocurrency has ranged from declaring it illegal, attempting to regulate it, ignoring it, treating it as a commodity and/or like any other financial asset and regulating it as such; or more recently seriously considering state-backed digital currency. Presently the assessment appears to be that of ‘co-existence’ with central banks providing national/sovereign currency, primarily digital currency, and cryptocurrency vying with gold as a back-up or ‘insurance’ against the perils of a sovereign fiat currency.
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