The Future of the Monetary System [pdf]

From the Conclusions section:

> The main question we tried to answer is whether a significant shift away from the US dollar as the dominant “hegemonic” currency is likely to occur in the foreseeable future, and in which direction the monetary system might develop. The key conclusion was that the fate of the US dollar as the currency hegemon depends on a number of factors, with the degree to which US policy makers would be able to maintain macroeconomic stability relative to other countries of supreme importance. Only if stability is maintained will the US dollar retain its position as the safe-haven currency of choice.

In heavily hedged terms, they conclude that the situation is currently stable and likely to remain so. My opinion is that there's good information in this document but the editing (mostly in the sense of structure and clarity) is quite poor, prone to using the very real complexity of the issues at hand as an excuse for weasel words, wishy-washiness, and desperation to please one's boss. In reading this document, I recommend that you keep in mind that the document is from late 2022 and Credit Suisse imploded in early 2023, so, as the document's authors might say, one suspects that it does not represent a level of intellectual rigor that one would prefer to see from a globally important bank.

No and that's why they are now toys.

I think the fundamental and radical idea of cryptocurrency is that this is not true. Currency can have value even if it isn't derived from the point of a sword.

I know crypto has a lot of scam baggage and that is unavoidable for a permissionless system, I think. Regardless, the idea that you can wrest away the levers and dials of monetary policy away from world powers and put it in the hands of a permissionless system is a powerful and potentially system-altering one. I have been a fan of cryptocurrency for this reason since well before people were writing news articles about them.

I think the phenomenal success of crypto to this point is a strong indicator that you might be wrong, or at least not totally right

1. Just ban it. Kick it off the app stores, prevent financial services companies from dealing with it, and maybe make an example of a renegade bitcoin ATM company to stop nerds like us from getting ideas.

2. Attack the blockchain itself. It can stand bozo-scale hacks, but NSA scale? They control the internet backbone. They can just drop the packets. They have hardware backdoors all over the place and have been known to successfully hack completely airgapped setups. Maybe they even bring clever math/chips to the fight. That's more speculative than necessary, but again, not actually very speculative next to their historical accomplishments.

3. Deploy police to server room. Or special ops, if they played the non-extradition-country game correctly.

We aren't talking about Goldfinger levels of infrastructure. No secret island nuclear program is necessary... but even if it were, remember that superpowers are absolutely capable of that sort of thing.

Whatever your thoughts on crypto, it seems short-sighted not to include some discussion of it in a "Future of the Monetary System" paper. You have countries like El Salvador moving to a Bitcoin standard, BlackRock's CEO saying "tokenization will be the next evolution in markets," Norway testing Ethereum-based CBDCs, etc.