## EDITOR'S LETTER

## Source details

**Canonical URL:** [EDITOR'S LETTER](https://www.imf.org/-/media/files/publications/fandd/article/2018/june/letterfr.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/fandd/article/2018/june/letterfr.pdf.md)
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### Cover theme and overview
- Issue theme: Money, Transformed — The future of currency in a digital world.
- Illustrator Michael Waraksa’s June 2018 cover depicts the evolution of money in the context of digitalization.
- Lead ideas: financial technology (fintech) offers alternatives to traditional means of payment and could redefine money; the issue explores possible consequences, both positive and negative.

### Historical and conceptual context
- Money functions emphasized: holds its value over time, can be easily translated into prices, and is widely accepted.
- Quote preserved: “MONEY MAKES THE world  go  around,” Liza Minnelli famously sang in the movie Cabaret.
- Harold James (Princeton University) view: Traditionally, money has always been an expression of sovereignty—even if states at times failed spectacularly to guarantee its value.

### Cryptocurrencies, distributed ledger technology, and central banking
- Assessment presented: Most experts agree that so-called cryptocurrencies do not possess all the core attributes of money.
- Potential of distributed ledger technology: has the potential to transform payment services by removing the need for an intermediary.
- Political motivation noted: Removing intermediaries and weakening state authority over the money supply was the political motivation behind Bitcoin.
- Central banking implication: Reduced role of central banks and weakened state authority over the money supply are possible outcomes if intermediaries are removed.

### Cash usage and central bank policy choices
- Statistic: At present, only 13 percent of transactions in Sweden are settled with cash.
- Policy implication: If banknotes and coins decline, the public could lose access to a state-guaranteed means of payment unless central banks redefine their role.
- Possible central bank response: Issue their own digital tokens — a solution requiring careful consideration of choices and policy trade-offs (as noted by the IMF’s Dong He).

### Balancing risks and benefits of fintech
- Worry and guidance: Concerns about the misuse of financial technology should be weighed against its potential benefits to society.
- Advice quoted from IMF Managing Director Christine Lagarde: “Above all, we must keep an open mind about crypto assets and financial technology more broadly, not only because of the risks they pose, but also because of their potential to improve our lives.”

### Highlighted content in this issue
- Stefan Ingves on going cashless — P.11
- David Donaldson profiled — P.36
- Epidemics and economics — P.46

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2018/june/letterfr.pdf_