Posted by Social Science Research Network
By Peder Østbye (Norges Bank)
Abstract: Several cryptocurrencies are now circulating in the economy. Many have significant market value measured in national currencies. The intention behind most of these currencies is to replace or supplement the traditional payment system based on national currencies. Cryptocurrencies can potentially obtain a significant role in the payment system. However, the presence of cryptocurrencies raises several public policy concerns. This paper addresses competition policy. It discusses as to whether traditional competition policy instruments such as antitrust and regulation are adequate to address competition policy concerns. It is found that traditional competition policy instruments are inadequate. Direct participation by the public in the form of central bank digital currencies may be an adequate remedy. The relationship between competition policy and other relevant policies for the cryptocurrency markets is also discussed.