Argument by false analogy: The mistaken classification of bitcoin as token money

This paper investigates a distinction in recent literature between digital ‘token’ money (Bitcoin is supposed to be an example) which passes directly between holders and account-based money which does not. This distinction is based on a false analogy between cryptocurrency and physical cash. Cryptocurrency like bank money is account-based; cryptocurrency payments are validated by reference to account holdings, they are not a virtual object; commercial bank money (not cryptocurrency) has token characteristics, representing a claim on something else. This clarifies the current discussion of central bank issue of digital currency: the issues involved become conceptually very simple not conceptually complex.