Foreword to "Regulating Digital Currencies"

Over the past fifty years, money and payments have evolved from largely paper-based analogue physical instruments and processes to largely digital in nature. This process has included the development of electronic payment systems such as CHIPS and Fedwire, the evolution of card-based payments such as Visa and MasterCard, cross-border systems such as SWIFT, and implementation of wholesale real time gross settlement systems (RTGS) in over 130 countries since the 1980s. With the advent of mobile and smart phone based payment systems such as mPesa and Alipay over the last 20 years, around the world, cash is being used less and less. This trend was significantly accelerated during the COVID pandemic and by the launch of digital public financial infrastructures such as digital IDs and "fast payment systems" such as Pix in Brazil, bringing billions of people into the formal financial system for the first time via instantaneous electronic payments. In parallel, over the past fifteen years, a range of new alternatives have emerged, following the Bitcoin Whitepaper in 2008 1 and the launch of the Bitcoin blockchain in 2009 2 These "cryptocurrencies" were designed to address the many issues which have afflicted finance over the past several thousand years, replacing state-based systems with decentralized technological alternatives. 3 Cryptocurrencies have been followed by stablecoins from 2013-linked in value to fiat currencies or other real-world benchmarks. 4 In the aftermath of Facebook's proposal in 2019 to create its own cryptocurrency called Libra, which would have been the first "global stablecoin," 5 a global regulatory reaction via the Group of Twenty and the Financial Stability Board emerged, 6 along with an explosion in state-based projects called "central bank digital currencies"