The arduous path to moneyness: Cryptocurrencies compared to mobile money

Privately created money based on Distributed Ledger Technology (DLT) emerged in the late 2000s at the same time as mobile money. The latter, exemplified by M-Pesa, has become a prevalent form of money in several countries, especially in Africa. DLT-based cryptocurrencies, in contrast, have achieved a rather limited monetary presence. This paper compares the creation and functioning of these two forms of digital money to establish reasons for the relatively weak social acceptability of cryptocurrencies. For the most prominent cryptocurrencies, such as Bitcoin and Ether, these reasons are shown to include deficiency as units of account, high costs of use, and fragmentation of blockchains. Ultimately, these are due to the decentralized and permissionless character of privately created DLT-based monies, which invites peculiar forms of capitalist profit making, including speculation. Despite its weaknesses, such money has the potential to become widely used, but that would require state intervention, which would alter its character.