The crypto bubble has officially burst. For the first time since 2020, the end of the last crypto winter, Ethereum mining is no longer profitable for those drawing power from traditional grids, as energy prices skyrocket and token prices plummet. No wonder graphics cards are back in stock, after years of miners eating up supply.

Even the Financial Times has connected these developments to a telling precedent. The figures thus far – the total value of all cryptocurrencies is down around 70 percent from the peak last November, cutting $2 trillion off the market’s value – are ominously familiar: eight months after the dotcom bubble peaked in early 2000, publicly traded internet companies were estimated to have lost 60 percent, or $1.7 trillion, of theirs.

If the crisis that sunk a thousand startups did ultimately make space for the tech giants, what should we expect from this implosion? A long read published in Barron’s forecasts more gloom in the short-term. Crypto's problems have less to do with its biggest coins losing water than with the erratic ecosystem that has spawned in their wake. DeFi’s ‘freewheeling financial practices’ have not revolutionised Wall Street, just reinvented many of financial products, all without safeguarding against future crises. Governed only by those with a speculative stake in growing the industry, expect knock-on consequences as unbridled leverage forces more liquidations and emergency lines of credit.

To fill the spiralling vacuum, which threatens to destabilise the global financial system writ large, the major state powers will be competing through their central banks. Some of the studies we recommend this month enumerate the strategic advantages that China is poised to capture through its digital yuan pilot; another paper details the EU’s lukewarm efforts to catch up. Less clear is whether political interventions will manage to dampen emissions as much as the bear market already has – the price drops have already reduced energy consumption by an amount comparable to countries like Austria. That’s still little solace when a single month’s worth of NFT transactions emits enough carbon to kill 18 people. At this point, it's hard to imagine what the crypto world will look like after the summer, but we'll be back with a new edition in September.

A Digital Euro for the EU: A Comment on Potential Impacts

A well-designed digital euro that protects citizens' rights 'by-design' can serve as a viable alternative to cryptocurrencies and foreign CBDCs, reducing their relative attractiveness and thereby also any risks associated with their excessive popularity among EU citizens.

On Crypto and the Future Monetary System

Structural flaws make the crypto universe an unsuitable foundation for a monetary system: it lacks a stable nominal anchor, while limits to its scalability result in fragmentation. Contrary to the decentralisation narrative, crypto often relies on unregulated intermediaries that pose substantial financial risks in their own right.

The Color of Money at the Financial Frontier

Contemporary development finance agendas have been (rightly) critiqued for entrenching the centrality of market rule in the developing world. But these critiques must be enriched with studies of how race and empire inhabit reform agendas, and are centrally implicated in the construction of particular forms of market rule.

Redeemable Platform Currencies

Can massive online retailers such as Amazon and Alibaba issue digital tokens that potentially compete with bank debit accounts? There is a long history of trading stamps and loyalty points, but new technologies seem poised to make redeemable assets a significant store of value.

Governance and Societal Impact of Blockchain-Based Self-Sovereign Identities

It is clear that the development of self-sovereign identities on blockchains will be influenced by existing bureaucracies, as well as by the behaviour of actors at the centre of power structures as they presently stand. The latter may end up working only to reinforce current practices, and provide no better user control or improved privacy.

Digital Currencies and Great Power Rivalry: China as a Disseminator in the Digital Age

As the era of CBDCs approaches, Chinese influence over global networks and governance frameworks appears poised to translate into strategic advantages in economic, technological, and ideological spheres – the very fulcrums of US–China hegemonic rivalry.

Blockchain, Climate Damage, and Death: Policy Interventions to Reduce the Carbon Emissions, Mortality, and Net-Zero Implications of Non-Fungible Tokens and Bitcoin

Proof-of-work models need to be phased out in the same way that inefficient appliances are eliminated from the market. To move away from deliberately polluting blockchains to more sustainable consensus protocols, we must also eliminate electricity subsidies and begin charging a premium for miners' electricity consumption – for these private enterprises carry an added social cost.

Central Bank Speeches and Digital Currency Competition

By studying how markets react to speeches about central bank digital currencies, this paper argues that traders do not view CBDCs as a threat to cryptocurrencies. Rather, more positive stances on CBDCs appear to be interpreted as favourable signals for other forms of digital currencies, too.

Blockchain Imaginaries and Their Metaphors: Organising Principles in Decentralised Digital Technologies

Blockchain infrastructure and protocols rely on substantial metaphors (e.g. gold, gas) to govern resource allocation; morphological metaphors (e.g. work, trust) to generate consensus; and structural metaphors (e.g. chain, transaction) to establish shared knowledge. These metaphorical displacements both make blockchain technologies intelligible, and simultaneously position them as new forms of economic, political, and epistemological organisation.

Fintech, Cryptocurrencies, and CBDC: Financial Structural Transformation in China

Reviewing recent literature on the rise of CBDCs – and specifically on China's digital renminbi (e-CNY) pilot – this study shows how enhanced public confidence can bolster innovation in this realm. If effective regulation manages to incentivise market participants, as well as protect them, the e-CNY might well become a mainstream currency.