Historical Monetary Controversies Shape Digital Tokens
SNB Economist Romain Baeriswyl Connects Crypto, CBDCs, Stablecoins with Old Monetary Theory
SNB Economist Examines Old Monetary Theories in the Digital Age
A new Working Paper from the Swiss National Bank explores what historical debates on the origin and nature of money reveal about cryptocurrencies, CBDCs, and stablecoins. Romain Baeriswyl demonstrates that many fundamental questions of monetary theory remain relevant for new digital forms of money.
Economist Romain Baeriswyl of the Swiss National Bank (SNB) addresses a question in his new Working Paper that is gaining renewed importance given Bitcoin, stablecoins, and central bank digital currencies: What is money, how does it emerge, and what properties should it possess?
The paper is titled “Yesterday’s Controversies for Tomorrow’s Money” and was published as SNB Working Paper 10/2026. Baeriswyl examines modern forms of money through the lens of historical monetary theoretical controversies. According to his presentation, the technical forms of money have changed significantly, while fundamental theoretical questions about the origin, nature, and use of money persist.
Origin of Money: Market or State?
The first controversy concerns the question of how money originates. Baeriswyl contrasts two opposing schools of thought.
The so-called Natural Law of Money posits that money can emerge from human action and economic exchange without necessarily being planned or created by a state. The opposing position, the State Theory of Money, views the state as the decisive factor in the emergence of money.
Baeriswyl contrasts these positions using, among other things, two well-known statements by Friedrich von Hayek and John Maynard Keynes. Hayek describes money as the result of human action, but not human design. Keynes, conversely, characterizes money as a special creation of the state.
The paper also refers to historical examples. For instance, precious metals were used as means of payment before states began minting coins from them. Modern cryptocurrencies are also discussed as an example of a means of payment that can emerge outside state control and be accepted by private actors.
What Is Money: Economic Good or Credit?
The second controversy deals with the nature of money. Here, the Economic Good Theory of Money and the Credit Theory of Money stand in opposition.
According to the first view, money is an independent economic good, serving primarily as a generally accepted medium of exchange. The Credit Theory, in contrast, fundamentally regards money as a form of credit or a claim on economic goods.
Baeriswyl emphasizes that this question must be distinguished from the question of the origin of money. It is not about who created money, but about what money is in its essence.
In this context, the paper also discusses the Regression Theorem developed by Ludwig von Mises. This theorem attempts to explain how the initial demand for a good as a medium of exchange could arise by drawing on an already existing non-monetary value.
This question is also relevant for cryptocurrencies. Baeriswyl discusses whether Bitcoin is compatible with the Regression Theorem, even though Bitcoin does not possess an obvious non-monetary use-value like historical monetary goods. The paper presents various arguments on this, rather than concluding the question with a simple yes or no answer.
Double-Spending: Why Digital Money Is Special
The third controversy concerns so-called double-spending, which is the question of whether the same amount of money can be used multiple times.
For digital tokens, preventing such multiple use is a central technical challenge. Modern cryptographic and distributed ledger systems make it possible to transfer digital tokens without requiring a central administrator to maintain all account balances.
However, Baeriswyl shows that an older economic controversy lies behind this technical question. Today's monetary system relies significantly on an elastic money supply. In the case of commercial bank deposits, the same central bank money base can serve as a foundation for additional credit and money creation. Cryptocurrencies like Bitcoin, however, adhere to the principle that a token cannot simultaneously belong to multiple persons or be spent multiple times.
Thus, the paper connects the technical question of double-spending with a fundamental economic question: Is an elastic money supply an advantage for the monetary system, or does a limited and non-expandable money supply offer an advantage?
A Framework for Bitcoin, CBDCs, and Stablecoins
The systematization in the fifth chapter of the paper is particularly interesting. Baeriswyl classifies various forms of money along several theoretical dimensions: the origin of money, its nature, and the question of whether double-spending is possible.
The resulting framework distinguishes, among other things, between Natural Law and State Theory, and between Economic Good and Credit. Depending on their design, precious metals, cryptocurrencies, state-issued fiat money, bank deposits, CBDCs, and various forms of stablecoins can be classified within it.
Particularly with stablecoins, it becomes clear that a simple classification is insufficient. Baeriswyl distinguishes, for example, between fully and partially collateralized stablecoins, as well as by the asset in which they are redeemable. Partially collateralized stablecoins can contribute to the expansion of the money supply, similar to fractional-reserve bank deposits. Fully collateralized stablecoins, however, exhibit different monetary characteristics.
CBDCs are also considered in a differentiated manner in the author's model. He classifies potential central bank digital currencies, among other things, as state-issued money. At the same time, he addresses their properties within the distinction between economic good and credit.
Bitcoin and the Question of the Money of the Future
The paper does not conclude that a specific form of money will unequivocally determine the future. Rather, according to Baeriswyl, the question remains open as to which tokens are best suited to fulfill the functions of money in the future.
The different forms of money exhibit distinct properties. Cryptocurrencies are based on cryptographic protocols and can emerge independently of the state. State-issued fiat money, conversely, is closely linked to state institutions. Bank deposits and certain stablecoins, in turn, are based on credit relationships and can contribute to money creation depending on their design.
Baeriswyl thus primarily shows that the discussion about the future of money is not solely a technical question. Behind Bitcoin, CBDCs, and stablecoins lie different conceptions of where money derives its value, what money is in its essence, and how its quantity should be controlled.
Not an Official SNB Position
The classification of the document is important: It is a Working Paper and not an official monetary policy statement by the Swiss National Bank.
The paper explicitly states that the views, opinions, results, and conclusions expressed therein are those of the author and do not necessarily reflect the position of the SNB. According to the document, Working Papers serve to present research for discussion and stimulate further debate.
The paper primarily provides a theoretical framework to better compare the different forms of digital money. The historical controversies are not presented as definitively resolved questions, but rather as tools to better understand current developments in the monetary system.
Conclusion
The central insight of the analysis is: The digitalization of money has changed many technical possibilities, but the fundamental questions of monetary theory have remained. Where does money originate? What makes money, money? And what are the consequences when the same monetary base can be used multiple times to create means of payment?
With his Working Paper, Romain Baeriswyl demonstrates that these questions did not arise only with Bitcoin, stablecoins, or CBDCs. Rather, the new forms of money give old theoretical controversies new practical significance.
Sources
- Yesterday’s Controversies for Tomorrow’s Money, Romain Baeriswyl, SNB Working Paper 10/2026, August 2026.
- Swiss National Bank, SNB Working Papers.
