Recently, I argued that a central bank cryptocurrency can be a useful tool in the struggle to democratise money. Such a tool is, of course, not enough. The main task in democratising money is first to democratise the central bank – before deploying useful instruments like a central bank cryptocurrency. As many readers (correctly) pointed out, democratising the central bank is a tall order, given the stranglehold over it by the usual bankers. However, it is a gross error to imagine that the central bank can be bypassed and money democratised by means of apolitical cryptocurrencies like bitcoin. This fantasy of apolitical money liberating us from central banks is dangerous and based on a deep misunderstanding over what money is and how it works. To make the point, I am sharing here Chapter 7 of TALKING TO MY DAUGHTER (Penguin 2017). I hope you enjoy it.
Before reading on, let me recap the main point:
First, the demos must wrest control over the central bank from the bankers.
Then, a central bank cryptocurrency is deployed to democratise the payments’ system and ensure that the money tree is harvested for the many, not the very, very few!