How Will Blockchain Technology Transform the Current Monetary System?

Jul 2, 2020 12:41:28 PM / by Manuel Klein, Jonas Groß, Philipp Sandner

Medium

Why should the payment systems we use and the money that is transferred via these systems itself make use of distributed ledger technology (DLT), namely Blockchain technology, the underlying technology of cryptocurrencies such as Bitcoin? This article gives a brief explanation of the structure of the current money and payment system and the functioning of blockchain technology with Bitcoin as an example. It further elaborates the advantages of DLT and its difference to the current design of the monetary system. The last chapter summarizes the different ways of how DLT can be used in our current money and payment system.

Written by Manuel Klein, Jonas Groß, Philipp Sandner

The Digital Euro Association (DEA) is a think tank specializing in central bank digital currencies (CBDCs), stablecoins, crypto assets, and other forms of digital money. In particular, we focus on the digital euro. Our mission is to contribute to the public and political discourse through research, education, and by providing a platform and community for policy-makers, technologists, and economists to discuss digital money-related topics. We are committed to independence and excellence, aiming to set the agenda and to shape policy by encouraging new ideas and forward-thinking in the field of digital money. We target new and innovative topics such as the digital euro and Stablecoins, but also “classical” crypto assets such as Bitcoin and Ether.

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