Guillem López Casasnovas, Professor of Economics from the Department of Economics and Business of UPF and member of the Governing Board of the Bank of Spain 2005-2017

In a subject as complex as the one I am approaching in this text, which is so multi-sided and is constantly being innovated with great ingenuity, it is hard to ‘keep your footing’. But I’d like to be open and respond to the people who ask for my opinion on these new quandaries with a simple, as I see it from what I read and what experience tells me.

Blockchain, platforms in general, are here in the real world to stay. The process of removing the middleman for everything that is new -particularly when what is old still hasn’t died-, poses dangers and opportunities. Dangers because the counterfactual condition of the past, the old way of doing things, persists, further marked by the generation gap. Opportunities because in this new context it’s the winner that takes all who prevails. Certainly, the changes will affect whoever has made a profession out of being a middleman: registrars, financial compensators, commercial liquidators, business transactioners, notaries, activity hubs, contract validators, activity verifiers, payment settlers. Anyone involved in these activities can recycle their professions and even use these new opportunities to their advantage if they are able to emerge from their inertia and recycle their knowhow. The resulting decentralisation is in line with societies that want to be increasingly free. But beyond public endorsement, the field which has opened up is that of personal responsibility: no good samaritans, through informed decisions, but which end up as irreversible operations. So there are no more user protection mechanisms -our source of guarantees-, individuals that assume the risks of volatility and compensate for them in their own pool throughout the sequence of their decisions and not the mutualisation of the decisions of others. A totally new world. The individual speculates (bear in mind the Latin root of this word). And the regulator is present but without interfering unless basic rights are violated. Currencies circulate without the ‘fiat’ of a responsible authority, neither in terms of emissions nor records. Credit and liquidity risk is the responsibility of their users (with no public compensation for theft or unforeseen disasters!) based on a monetary policy which has very little room for action. A complete revolution for our understanding of today’s macroeconomy.

Like many things in life, the new situation opens windows to potentially great benefits, but they entail a high risk premium. Hence, with great temptation to distort the facts, the new, open and decentralised markets, are to be oligopolised, the benefits going to the users, who will also be protected from the costs (the implicit risks). Wait and see.