Digital currency Transacting and value exchange in the digital age Katherine Stewart An overview of the consultation on digital currency held as part of the Corsham Institute Thought Leadership Programme 2017 CORSHAM INSTITUTE For more information on this publication, visit www.rand.org/t/CF371 Published by the RAND Corporation, Santa Monica, Calif., and Cambridge, UK Copyright 2017 RAND Corporation and Corsham Institute R is a registered trademark. Limited Print and Electronic Distribution Rights This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions. This report was produced following a consultation at St Georges House, as part of a programme of events in the Corsham Institute 2017 Thought Leadership Programme. This report should be read in conjunction with the Building our Connected Society summary report and the perspective papers from the series (which are available at www.randeurope.org/connectedsociety and https:/corshaminstitute.org/research). The consultations in the 2017 programme were: Digital learning: Digital technologys role in enabling skills development for a connected world March 2017 Open science: the citizens role and contribution to research April 2017 Currency: Redefining the way we transact in a digital world May 2017 Civic engagement: How can digital technology encourage greater engagement in civil society? June 2017 This programme hosted at St Georges House was developed in partnership by Corsham Institute and RAND Europe. Corsham Institute (Ci) is a not-for-profit organisation that is working for a fair, inclusive, prosperous and creative society based on trust and security. www.corshaminstitute.org RAND Europe is a not-for-profit research organisation that helps to improve policy and decision making through research and analysis. RAND Europes work combines academic rigour with a professional, impact-oriented approach. www.randeurope.org St Georges House, Windsor Castle is a place where people of influence and responsibility in every area of society can come together to explore and communicate their views and analysis of contemporary issues. The aim is to effect change for the better in society by nurturing wisdom through dialogue. www.stgeorgeshouse.org CORSHAM INSTITUTE 3 Foreword 1 For more information, visit: https:/www.rand.org/randeurope/research/projects/corsham-institute-thought-leadership-programme.html or https:/www.corshaminstitute.org/research/ The pervasiveness and ubiquity of all things digital has accelerated over the past 20 years and continues to grow exponentially. Digital technology is becoming increasingly intertwined with everyday life: from schooling and education, to political engagement and even financial and health management. Developments in digital technology, and the speed at which they emerge, drive innovation and new applications that touch our lives in different and often profound ways. While there are numerous opportunities and aspirations associated with digitalisation, there is also a crucial need to understand and mitigate the challenges it presents to society. In partnership, Corsham Institute and RAND Europe design and deliver an annual programme of Thought Leadership at St Georges House. From its inception in 2016, the aim of the programme has been to explore the opportunities and challenges that digital technologies are creating within different aspects of society.1 The Currency and the Future of Transacting Consultation on 4 and 5 May 2017 was the third of the four consultations that took place as part of the 2017 Thought Leadership Programme. Other events in the series focused on: Education and skills Open science Civic engagement Building our Connected Society, a summary of the key findings identified across the four events in the 2017 Thought Leadership Programme, is published alongside this report. 4Digital currency Background 2 See: https:/www.chathamhouse.org/about/chatham-house-rule 3 Stewart, Katherine, Salil Gunashekar Snchez, Santiago Jos, a broad financial infrastructure has arisen over time, including complex norms and structures relating to the traditional exchange of value and the physicality of cash. In this regard, Bitcoin and other innovations in the ability to transact represent an unbundling of financial structures: the ability to separate out some discrete functions of the traditional banking system (such as facilitating transactions between individuals), with no requirement to engage with othe