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JEL Code

B53, E32, E42, E51, G21

Abstract

This article critically examines Blasco and García de Enterría’s proposal that certain Bitcoin-denominated second-layer instruments—real bills, private scrip, and cash notes—could reduce Bitcoin’s short-term volatility and function as media of exchange. From a full-reserve Austrian perspective, it argues that the relevant distinction is not between base money and higher layers as such, but, within those layers, between fully backed monetary certificates and fiduciary media. Although second-layer instruments may smooth short-term volatility, those that operate as fiduciary media introduce counterparty risk, redemption risk, and credit expansion unsupported by real saving, potentially generating long-term instability.

Erratum

During the publication process, the footnotes were inadvertently omitted from the published version of this article due to a production error. The online version has been corrected to restore all footnotes as provided in the authors' accepted manuscript. The omission does not affect the results, analysis, or conclusions of the article. The Editorial Office apologizes to the authors and readers for this error and any inconvenience it may have caused.

Publication Date

7-6-2026

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