Strategic Money and Credit Ledgers / Markus K. Brunnermeier, Jonathan Payne.

Format:

Book

Author/Creator:

Brunnermeier, Markus K.

Contributor:

National Bureau of Economic Research.

Payne, Jonathan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31561.

NBER working paper series no. w31561

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

This paper studies strategic decision making by a private currency ledger operator, which faces competition from public money and/or other ledgers. A monopoly ledger operator can incentivize contract enforcement across the financial sector by threatening exclusion, but it can also impose markups through its pricing power. Currency competition limits rent extraction, but also makes coordinated contract enforcement more fragile. The emergent market structure bundles the provision of ledger and platform trading technologies. Regulation to ensure platform cooperation on contract enforcement and competition on markup setting is effective so long as agents can easily switch between platforms.

Notes:

Print version record

August 2023.