Democratizing money? The role of cryptocurrencies

The article proposes a critical perspective on the potential impact of the growing cryptocurrency ecosystem on the process of democratizing money. After examining the various interpretations of the term “democratization”, we focus on one interpretation: that of financial inclusion. We propose a categorization of currently available cryptocurrencies, distinguishing four macro-categories: Bitcoin; altcoins, which include all alternative and/or complementary cryptocurrencies to bitcoin; stablecoins, which are digital coins whose value is pegged to a fiat currency; and central bank digital currencies (CBDCs). We provide a description of the economic characteristics of each category and analyse how and whether these instruments can contribute to financial inclusion. While each category appears to be capable of contributing to the democratization of money, CBDCs are the only ones that can truly pursue the goal of financial inclusion. Therefore, we argue that it is not money as such that needs to be democratized, but rather the role that central banks play in the economic system.