1. Future of Global Monetary Policies and Technologies
V.V.Skalkin, Cand.ec.sci, CIBFM, Assoc.prof, Department of Macroeconomics,
Financial University, Moscow, October 11-12, 2016

2. How Blockchain will Change Monetary Landscape?
Blockchain technology may lead to a radically different monetary landscape where current profit pools are disrupted and redistributed towards the owners of new highly efficient blockchain platforms.
However, what is blockchain technology? So far, it means many different things to many different people.

4. Implications to Monetary and Fiscal Policy Institutions
1. Currency competition. For any Central Bank any cryptocurrency looks like an any foreign currency. Any cryptocurrency , or even just the threat of it, will put much stricter limits on the amount of revenue governments can extract through the inflation tax. 
2. Maturity transformation using a foreign currency. Cryptocurrency may play the same role as USD in many countries which limits the role of national CB as a lender-of-last resort
3. The safe asset role. During the turbulent times, a cryptocurrency may have lower risk than other assets and even national currency. , and the role of the Ministry of Finance may be diminished in case the cryptocurrency has lower risk and higher rating than the national treasury bonds.

5. Implications to Monetary and Fiscal Policy Institutions (2)
4. Securities exchange. The standard macroeconomic model typically assumes that securities are exchanged in frictionless financial markets, where trade is instantaneous and property rights are enforced at zero cost.
5 . Financial stability. Some people claim that blockchain technology will one day make fractional reserve banking and maturity transformation outdated. It will remove opacity in financial markets, something that would surely lead to a more stable financial system. But lack of transparency, information asymmetry is not the only problem for financial stability.
6. Central bank cryptocurrency. The existing structure of money and payments (including central bank design) was built for the Blockchain world. The Central Bank may want to transfer to digital currency technology.

6. The Central Bank Cryptocurrency (FedCoin)
the U.S. Treasury, for example, already offers online digital bond accounts
Advantages of central bank cryptocurrency are:
1. There would be no need for deposit insurance since the central bank accounts have no default risk (they can just print the money, after all).
2. Cash managers at large corporations could simply deposit their money overnight at the central bank, rather than seek collateralized lending arrangements (repo) in the shadow banking sector.
3.The cost of maintaining the paper money supply can be eliminated.
4. It is easy to pay interest (possibly, negative) on digital money accounts, leaving central banks with an additional monetary policy tool

8. Two Biggest Drivers of Financial Innovation
Regulation
Technology
Source:(Two Drivers of Financial Innovation
Larry D. Wall , FRBAtlanta)
2.cfm
February 2014

9. Regulation as a driver of innovation
Complying with regulation raises the cost of financial transactions by consumers and other users of financial services. As financial services are highly regulated along many dimensions, these restrictions create numerous opportunities for innovations that reduce or lower regulation cost (L. D. Wall , 2014)

10. Brief History Of Monetary Policy
Central Bank ( Sweden, 1607)
Using Open Market Operations US (1922) (R.Timberlake Monetary Policy in the United States: An Intellectual and Institutional History (1993)
Setting bank rate on the base of target overnight rate, determined by open market operations - Canada, 1956(P.Samuelson,1992, p.299)
Using Inflation Targeting ( New Zealand)(P.Krugman,2013,p.461)
Using Quantitative Easing (Japan) (量 􀳦 􀳦 金 融 緩 和, ryōteki kin'yū kanwa)
Using Quantitative and Qualitative Easing QQE Speech by Governor Kuroda at a Conference Held by the LSE on Mar. 21, 2014 (How to Overcome Deflation) 
Unconventional Monetary Policy, TWIST, Tapering (US,UK)

11. Large and Growing Private Investment in FinTec
Private Investment in FinTech*:
2012: $2B
2013: $4B
2014: $12B
2015: $19B GRAPH

12. Private Investment in FinTech*:
Source: Citi GPS Report March 2016: Digital Disruption: How FinTech is Forcing Banking to a Tipping Point

13. Financial services implications
1. Disintermediation
Enables direct ownership and transfer of digital assets without need for an intermediary
2. Speed & Efficiency
Faster settlement on a relatively cost effective and efficient network Programmability
enables automation of capabilities on the ledger (e.g. smart contracts)
3. Automation
Provides irrefutable proof of existence, proof of process and proof of provenance
4. Certainty

15. Regulatory responses to virtual currencies
The Chinese central bank, citing concerns about an increased money supply outside of its control, as well as a difficulty in imposing taxation, enacted limits in the issuance of these currencies
Sweden has required virtual currency exchanges to register with the financial supervisor,
Germany and France have declared that certain Bitcoin related activities are subject to authorization.

16. Regulatory responses to virtual currencies (2)
The ECB has been actively considering monetary policy implications resulting from the introduction of centralized virtual currencies and decentralized crypto- currencies since at least 2012, highlighted the lack of supervision and concluded that they did not pose a risk to financial stability.
UK government introduced regulation pertaining to digital currency exchanges in the UK, to ensure that law enforcement bodies have the capabilities required to combat criminality in the digital currency space.
the New York Department of Financial Services (NYDFS) has released the BitLicense regulatory framework
Australian Senate will effectively put forward recommendations
to treat Bitcoin as money, as treating Bitcoin as a tradeable commodity

17. Ideal characteristics of a national digital currency
Legal
Fiat currency with equivalent value
Issued by Central Bank and Backed by Government
Adapted regulatory framework
Social
Interoperable and easy to use and accept
Beneficial participation for whole ecosystem
Maintain base level of privacy for users
Trusted store of value and unit of account

18. Ideal characteristics of a national digital currency (2)
Technological
Flexible infrastructure and offline use
Transparency and auditability for regulators
Stored and transferred securely and easily
Robust, reliable and scalable infrastructure

19. Conclusion
Blockchain technology and cryptocurrencies have huge potential as future holders of value
The landscape of financial services and monetary policies will dramatically change: conventional banks will cease to exist, possibly central banks too.
Introduction of blockchain require change in regulatory environment and all approaches to monetary and fiscal policies

20. Sources
1. What’s next for blockchain in January 2016
2. Paola Boel. Thinking about the future of money and potential implications for central banks. Penning- och valutapolitik 2016:1
3. Virtual Currencies and Beyond: Initial Considerations . i m f s t a f f d i s c u s s i o n n o t e. January 2016
4. Morgan H. McKenney The Opportunities, Implications and Challenges of Blockchain in Financial Services .CITI.21 June 2016
5. David Andolfatto Monetary policy implications of blockchain technology. Federal Reserve Bank of St. Louis. May 1, 2016

21. Thank You!