Barbarians at the monetary gate

One factor could further destabilize an already-tenuous leverage-and liquidity-based system: digital currencies. And policymakers and regulators have far less control on this factor.

The concept of private crypto-currencies was born of mistrust of official money. In 2008, Satoshi Nakamoto - the mysterious creator of bitcoin, the first decentralized digital currency - described it as a "purely peer-to-peer version of electronic cash", which "would allow online payments to be sent directly from one party to another without going through a financial institution".

A working paper by the International Monetary Fund last year distinguished digital currency (legal tender that could be digitized) from virtual currency (nonlegal tender). Bitcoin is a crypto-currency, or a kind of virtual currency that uses cryptography and distributed ledgers (the blockchain) to keep transactions both public and fully anonymous.