Blockchains, debt and globalisation: the limits to Central Banking in the 21st Century

The global monetary system is currently subject to three major trends: high public and private debts, increasing globalisation and the emergence of blockchain technology. Models of economies as complex systems formed by individuals acting on the basis of their psychology and social position suggest it is unlikely central banks will be able to control the money supply to meet their objectives in the face of these trends. Central banks are likely to return to their original function of maintaining financial stability and acting as banker to the government.

The role of central banks is to control the money supply and influence the economy for political ends. These political ends may be financial stability, controlled inflation, strong GDP growth, low unemployment, a particular exchange rate, it really depends on the political zeitgeist. The central bank expands the supply of money or decreases the supply of money in an attempt to … Read the rest

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