The appearance of cryptocurrencies like bitcoin is part of a much bigger trend—the re-emergence of private money as a competitor to state-issued currencies like the dollar, euro, yen or pound.

That’s the central argument of Professor George Selgin, our guest on the latest New Money Review podcast and a specialist in monetary history.

Selgin, who is director of the centre for monetary and financial alternatives at the Cato Institute and a professor emeritus of economics at the University of Georgia, is a supporter of Austrian economist Friedrich Hayek’s proposal that money should be denationalised.

According to Selgin, privately issued money has a long and successful history, as well as providing the foundation for a more stable financial system.

“We need to appreciate the extent to which desirable and beneficial monetary institutions can develop without any involvement of the state, and have done so in the past,” he says in the podcast.

“We owe most of our good monetary innovations to the private market. Of course, we owe some bad ones too. But on balance, we would probably be a lot worse off if we hadn’t taken advantage of private market institutions’ contributions to exchange.”

“When you look closely at the history of money, more often than not it’s been the case that when things have gone awry, it’s been because of misguided interference with the development of these private monetary arrangements,” says Selgin.

Listen to the podcast to hear Selgin and New Money Review editor Paul Amery discuss:

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• What's driving the resurgence of interest in private money?
  
• Do free banking systems or central bank-based systems handle financial crises better?
  
• Should governments have responded to the coronavirus pandemic with fiscal or monetary policy?
  
• Fintechs and why the US lags in monetary innovation
  
• The prospects for bitcoin as a future monetary standard
  

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