Money in the twenty‐first century: Cheap, mobile, and digital By RichardHolden. University of California Press. 2024. pp. 232. £24.00 (hbk). ISBN: 978‐0520395268. £21.54. (Kindle ebk). ISBN: 978‐0520395275

The value of Bitcoin might fluctuate wildly, but there is one thing that is guaranteed to keep rising – the number of news stories about digital currencies. This trend has only intensified since the US election of President Trump and his appointment of crypto fan Elon Musk as the new head of the ‘Department of Government Efficiency’ (DOGE), a nod to Dogecoin, one of the more obscure cryptocurrencies (which was itself started as a joke). And so it is against this backdrop that Money in the Twenty-First Century by Richard Holden, Professor of Economics at the University of New South Wales, Australia, is nothing if not timely. The book is billed as a layperson's guide and claims to offer an overview of the ways in which ‘money’ in its many guises might evolve over the coming decades, and chiefly characterised by being cheap, digital and mobile. Holden's writing is concise, racing through many of the questions currently dominating discourse and opinion, such as the impact of cryptocurrency mining on the planet, the threat to the US dollar's hegemony, and the move to a cashless society. With the future of the international financial system unclear, it is vital that these topics are brought to the fore in a balanced way that most people can understand. However, I didn't feel this book fulfils that role because, despite its description, it has a clear emphasis in favour of central bank digital currencies (CBDCs). On page 12 Holden states: “I argue that governments of advanced economies should create their own digital currencies … before a global private currency, powered by network externalities, emerges as dominant”. His warning, using Facebook's Diem proposal as an example, is that a popular private digital currency would have a level of power that could potentially influence democratic choices, which is why a well-organised CBDC is preferable. “With a CBDC, with all residents having a bank account, and with a sophisticated payments system in place, there would be little rationale for traditional cash”, he states on page 27, later devoting most of chapter 5 to how he would do it. He even has a name for his proposal: the ‘fedcoin’, a hybrid retail model. I was expecting a more detailed analysis of CBDCs, given the extreme level of control they could facilitate. For example, Professor Kevin Dowd (Durham University, UK) warned that they could even be considered ‘weaponised money’ at a lecture he gave to the Institute of International Monetary Research in October 2023. When a government is controlling all transactions, it has the power to decide what people can buy and when. This might start as a seemingly sensible way to prevent children buying vapes, but it could potentially morph into intrusions of all kinds. Anyone guilty of an action deemed ‘undesirable’ might find they can no longer receive payments from others, or shop beyond a certain radius of their home, or get fuel for their vehicle. The information at issue is simply what people spend money on … For all practical purposes, government has no interest in this kind of information, can already access it, and is in any case prevented from using it by existing laws in most democracies. The minor cost of a CBDC to individuals' privacy must be weighed against a meaningful reduction in tax evasion, illegal drug trafficking, and other socially destructive activities. Most people would agree that's a worthwhile trade to make. Holden's suggestion is for government policy changes to tip the balance in favour of a cashless society. “If government provides infrastructure such as a payment platform backbone, cashless payments can be made more attractive … A central bank digital currency might be the most powerful coordination device of all,” (p. 29). Reading this, I couldn't help but consider it a dystopian echo of F. A. Hayek's warning in The Road to Serfdom: “… if we face a monopolist, we are at his mercy. And an authority directing the whole economic system would be the most powerful monopolist imaginable.” The book barely touches on the experience of countries that have already tried CBDC projects, except in a section about China and its digital yuan (e-CNY) in chapter 6. Holden doesn't give much information about how it has fared so far, although he does make some suggestions for how it could do better. Reading the book left me with more questions than answers. These are just a few: How would such a centralised system protect itself from cyberattacks? Realistically, how much criminal activity would a CBDC prevent if criminals just use crypto instead? Can any government with a CBDC be trusted not to misuse its power? Though CBDCs could in principle be useful for several noble reasons, they lay the groundwork for a terrifying new age of supremacy and oppression. And this was the most frustrating aspect of the book: it didn't provide more analysis of such an important subject. Hayek argued for the denationalisation of money, believing that governments should not have a monopoly. Indeed, other economists, such as Dowd, advocate allowing alternative forms of money to compete, leaving the market to decide. To truly understand money in the twenty-first century, we need a book that explores all these scenarios.