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Distributed Ledger Technology and the Future of Money and Banking: Banking is Necessary, Banks Are Not. Bill Gates 1994

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  • Huibers Fred

    (Faculty of Business and Economics, Amsterdam University of Applied Sciences, 1102 CV Amsterdam, The Netherlands)

Abstract

Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf outlined an alternative to the current monetary system in which banks are replaced by a peer-to-peer system to issue and transfer digital money: the Bitcoin. While Bitcoin has attracted a substantial investment volume, the system has not achieved the status of a viable alternative monetary system. However, the distributed ledger technology (DLT) underlying the payment system is being applied successfully by financial institutions and is likely to have important implications for the future of money and banking. In this paper we therefore focus on the most advanced distributed ledger application in the financial industry: R3 Corda. This paper is structured as follows. In the first section, we relate the debate about systems of money creation to the rise of Bitcoin. Next, the development of R3 Corda is discussed and the lessons learned for monetary reform. We conclude with an assessment of the scope and likelihood of monetary reform as a consequence of DLT applications by central banks.

Suggested Citation

  • Huibers Fred, 2024. "Distributed Ledger Technology and the Future of Money and Banking: Banking is Necessary, Banks Are Not. Bill Gates 1994," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 14(2), pages 213-249, May.
    • Handle: RePEc:bpj:aelcon:v:14:y:2024:i:2:p:213-249:n:1
    DOI: 10.1515/ael-2019-0095
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    More about this item

    Keywords

    distributed ledger technology; monetary reform; money; banking; Bitcoin;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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