Cryptocurrencies are increasingly competing with state-issued legal tender. To hamper the advance of Bitcoin, central banks are developing digital legal tender. An old acquaintance from economic history will be rejoicing a third option. Central banks will do themselves a tremendous disservice should they attempt to replace physical cash with government-issued digital currencies. Dozens of central banks around the world are working full-throttle on digital legal tender which is also called the Central Bank Digital Currency (CBDC). According to the central banks, they primarily want to provide consumers with access to a simple, generally accepted, safe and reliable means of payment.…
Author: Prof. Patrick Schueffel
Author
Prof. Patrick Schueffel
Patrick Schueffel is professor at the Institute of Finance of Fribourg’s School of Management. His research interests focusses on the areas of Entrepreneurship in Banking & Finance, Innovation, Strategy and International Business and thus on Fintech. He has published widely in academic as well as practitioner journals in Switzerland and internationally. Prior to his academic career professor Schueffel served as the Chief Operating Officer of Saxo Bank (Switzerland) and was a member of the Senior Management of Credit Suisse.
In a few months we will join the chorus of well-wishers and collectively sing «Happy birthday, dear Blockchain!». Yes, indeed, on October 31st 2008 Satoshi Nakamoto published his famous white paper describing the Blockchain. So, the Blockchain will officially turn ten this year. Ten years may not sound a lot, but ten years in terms of technological development is a long period. Think of the smart phones being released in 2008: who nowadays uses a BlackBerry Bold, an Apple iPhone 3 or a Sony Ericsson Xperia X1? I mean, apart from my father in law? I assume only few. In…
Every so often I come across articles such as “7 Reasons Why Bitcoins Are Better Than Fiat Currencies” and thread headlines in discussion forums such as “This is why we hate fiat currency and why cryptocurrency should prosper”. What authors of such contributions totally misunderstand is: typically, cryptocurrencies are fiat currencies. The American economist and Penn State professor Neil Wallace put it on its simplest when he stated that “Fiat money is an intrinsically useless object that serves as a medium of exchange” (Wallace, 2017). And this is precisely what most cryptocurrencies are: intrinsically useless objects. Generally speaking a cryptocurrency…
In Switzerland a consortium made up by some of the country’s largest banks such UBS, Credit Suisse, Postfinance etc. attempts to introduce a new mobile payment system and digital wallet by the name of Twint. So far it has failed miserably. The question that arises is what the future holds in store for Twint: will it succeed or fail in the long run? Spoiler alert: I hate to say it, but this Swiss mobile payment system was doomed to fail from the outset. Nonetheless, not all hope is gone. The value of networks But let’s take it step by step.…