Achieving sustainable financial transactions under regimes without a central bank—an intertemporal comparison

Abstract

In this paper, by performing an intertemporal comparison, we investigate two monetary policy regimes where a central bank is absent, and we further refer on the mechanisms they developed so as to ensure the reliability of transactions between the parties involved. In particular, we mainly focus on the economic–monetary institutions of Athens during the Classical period (508–322 BCE) and we argue that (in principle) there are inter-temporal similarities between the Athenian and the current digital currencies regimes regarding the auditing principles with which the reliability of financial transactions is ensured. We found that in both cases, what is crucial for the success of the system is to achieve trust on the currency. By focusing on Classical Athens, we analyze the nature of the mechanisms and the auditing techniques used to ensure reliable commercial transactions. We also briefly analyze the modern cryptocurrency techniques. We found that the success of both financial regimes was based on achieving: low transactional costs, speed in commercial transactions, and what we characterize as security regarding the commercial transactions.