First and last central banks

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there is no reason why, in principle, central banks could not offer online digital money accounts for the public

From MacroMania: Monetary policy implications of blockchain technology

This is, essentially, what the first central bank did. The Bank of Amsterdam (the Amsterdamsche Wisselbank, founded in 1609) was, essentially, a municipal bank that provided a reliable and trusted payment mechanism. It did not lend money: it was there to make account-to-account ledger transfers. It had an important difference to previous experiments in the same direction: legal restrictions on settlement outside of the bank. The Amsterdam merchants were forced to open accounts there because of the law demanding that commercial payments had to be through the bank. They could deposit all sorts of different coins to credit their accounts and then make payments by instructing account-to-account transfers. The result was that Amsterdam supported a vibrant commercial marketplace with access to safe, efficient and cost-effective payments. This in turn supported the evolution of the Amsterdam bourse and helped to make the Netherlands rich.

So we are back the “big problem of small change”. How can private companies provide a circulating medium of exchange and still make a profit on it? It’s possible that they can because of new business models. But suppose they can’t? Suppose it falls to the central banks to provide the digital money for everyday use. As we discussed before, one of the objections to this