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The Hutchins Center Explains: How Blockchain Could Change the Financial System, Part 2
Article

The Hutchins Center Explains: How Blockchain Could Change the Financial System, Part 2

Peter Olson and David Wessel
Brookings Institution, 2016
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Editorial Rating

8

Qualities

  • Analytical
  • Innovative
  • Background

Recommendation

In part 2 of their report on blockchains and distributed ledgers in financial services (click here for part 1), David Wessel and Peter Olson of the Brookings Institution moderate conflicting viewpoints on how users, global financial organizations and government regulators will interact in and forge the long-term future of the disruptive technology. They explore nuanced questions such as whether cryptocurrencies are necessary for the underlying decentralized exchange system, as well as what role state entities and entrenched businesses will play in balancing payment evolution with regulation. getAbstract recommends this highly instructive article to executives interested in discerning the trajectory of blockchain and distributed ledger technologies.

Take-Aways

  • Advocates of bitcoin and other digital legal tenders stress that cryptocurrencies are essential to making the blockchain and distributed ledger technologies possible.
  • Digital currency proponents want to eliminate the conventional banking methodology of financial institutions as clearing houses and central banks as governors of the global money supply.
  • Contrarians, on the other hand, believe that the long-term use of the technology is not about currency but about leveraging its applications as a transaction processing and settlement tool.

About the Authors

Peter Olson is a research analyst at the Hutchins Center on Fiscal and Monetary Policy, where David Wessel is the director.

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