The OECD Secretariat has prepared a working paper for the hearing on the disruptive innovation in financial sector. Though the paper does not necessarily reflect the opinion of the member states or the Organisation as a whole, it is supposed to include the materials which may help it formulate its stance on the disruptive economy.
The working paper provides an overview of the cryptocurrencies' main features, paying special attention to the ways they differ from traditional national currencies. The paper suggests that “the existence of non-governmental stores of value is not new,” naming frequent flyer miles as one of the most cited stores of value in recent times. Still, according to the paper, digital currencies can be transformed into fiat much easier than any other non-governmental stores of value.
In relation to the threat of digital currencies being used by outlaws due to the anonymity of transactions, the paper points out that actually there is much more anonymity to cash:
“In fact, cash is likely a much more anonymous means of transferring value than virtual currencies. The ownership string for virtual currency is public, though not the actual owner name and address. If that name and address are at one point identified by law enforcers, law enforcers have a powerful mechanism to track entire chains of transfer of value, in a way that cash would never allow. The arguments used against virtual currency anonymity may thus be much weaker than comparable arguments against cash.”
The authors of the paper argue that, since “the level of public trust in virtual currencies is limited,” they are not ready to supplement traditional ones right now. It is yet to be seen, still, whether central banks will be given a chance to regulate them in future.
“There is an open question as to whether central banks should be given the role to regulate virtual currency, or whether other bodies with a less direct financial interest in the regulatory outcome may be more appropriate.”
The working paper looks into the challenges, including the limited number of people willing to use cryptocurrency:
“Even where virtual currencies are permitted, only an estimated 3 out of 10,000 merchants accept virtual currencies.”
The paper also expands on the possible risks associated with digital money, stating that “for virtual currencies to succeed and grow, rules will be needed,” as well as the “clear identification of virtual currencies as currencies,” which is yet to be accepted by most of the member-countries.
Maria Rudina
