Why is Bitcoin not Money? A Post-Keynesian view

Keywords: Cryptocurrencies, Modern Money Theory, Post-Keynesian Theory


Bitcoin got increasing popularity and was considered by the public as a great investment due to huge overvaluation in 2017. In parallel, economists and high-level technicians started to advocate the use of bitcoin and other cryptographic currencies as an alternative to national currencies. However, bitcoin is far from being considered as money, so it is hard for a monetary and payment system to emerge based on these technologies. This paper, apart from briefly presenting the Bitcoin System, shows why bitcoin is not money in the light of the Keynesian theory. We use Keynesian essential properties of Money and Modern Money Theory to define money, and to show that cryptographic currencies are not money. We then go back to Keynes' theory of portfolio choice, established in Chapter 17 of the General Theory, to show what bitcoin really is: at most, bitcoin is a perfect virtual commodity, a virtual liquid speculative asset.


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Author Biography

Matheus Trotta Vianna, Federal University of Rio de Janeiro (UFRJ)

PhD candidate in Economics at the Federal University of Rio de Janeiro (UFRJ). He holds a Master's degree and a degree in Economics from the same institution. Research Associate of the Economic Dynamics Group of IE-UFRJ and the Money and Financial System Group. He was executive coordinator and researcher at the Multidisciplinary Institute for Development and Strategy (MINDS).


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How to Cite
Vianna, M. T. (2021). Why is Bitcoin not Money? A Post-Keynesian view. Brazilian Keynesian Review, 6(2), 215-240. https://doi.org/10.33834/bkr.v6i2.211