Bitcoin and other crypto assets are challenging the paradigm of state-supported currencies and the dominant role of central banks and conventional institutions in the financial system. In this article by the IMF, Dong He suggests that as a medium of exchange, crypto assets offer much of the anonymity of cash while allowing transactions at long distances. The author explores how central banks can forestall the competitive pressure crypto assets may exert on fiat currencies. He suggests that fiat currencies be made more stable units of account, that crypto assets be regulated to prevent regulatory arbitrage, and unfair competitive advantage, and that central banks be made attractive as mechanisms of exchange in the digital economy.
http://www.imf.org/external/pubs/ft/fandd/2018/06/central-bank-monetary-policy-and-cryptocurrencies/he.pdf

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