Russian Journal of Economics and Law (Jun 2021)
Stablecoins as an implementation of Hayek’s private money theory
Abstract
Objective: to search for the new ways and forms of evolution of the institution of private money based on one of the types of cryptocurrencies called stablecoins.Methods: the study uses the approaches of the historical school by D. North, evolutionary economics and the Austrian school of economics, as well as the new institutional economics.Results: the initial tasks of creating a bitcoin have led, as a result of the hype around its value, to a distortion of the original concept of forming “private money” and to the use of cryptocurrency in illegal operations. The development of a private monetary paradigm is also hindered by the high volatility and unpredictability of the cryptocurrency exchange rate. The solution to this problem can be stablecoins, which are more capable of performing the function of “Hayek money”. The article considers the main provisions of the concept of de-monopolization of monetary circulation in Hayek’s theory, as well as the possibilities of its implementation, taking into account the institutional technological innovations that have occurred. The scheme of operation and distribution of stablecoins is studied on the example of the Tether cryptocurrency. The main reasons for the use of stablecoins as a private form of money, as well as some obstacles to their development, are identified. The possibilities of their further implementation in the real sector based on the system of flexible-collateral system of new issued tokens are considered.Scientific novelty: it consists in a holistic assessment of the evolution of the private money institutional structure based on the analysis of the characteristics and ways of implementing certain types of cryptocurrencies in the real sector. The prospects for the formation of the private money market based on the Hayek model are determined.Practical significance: it consists in the further development of the cryptocurrency market and the formation of the institutional environment of the private money market.
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