Digital Euro, Central Bank Digital Currencies And Bitcoin: Fed Watch
Listen To The Episode:AppleSpotifyGoogleLibsynOvercastThis episode of Bitcoin Magazine’s Fed Watch is a cosmic ride though the broad topics of money, central banks, and bitcoin. My co-host Christian Keroles and I started by extending the analogy of a financial hurricane, which I spoke about in another recent podcast. Many people point to certain asset price rises as a sign of inflation, however, I argued that it is a natural evolution of prices due to the malfunctioning financial system. This malfunctioning financial system acts similarly to a physical natural disaster by distorting supply and demand for goods. During a decade-long financial hurricane, changes occur not only to asset allocations of investors but the system itself can evolve, as well. It affects the pipes and infrastructure of the financial system, favoring relatively “safer” global assets like U.S. Treasuries and U.S. stocks. The economic behavior, products and relationships that form during a financial hurricane will favor hedging against deflation rather than risk-taking or behavior aimed at expansion. Next, we turned to central banks and Central Bank Digital Currencies (CBDCs). We listened to comments by Fed Chairman Powell and ECB President Lagarde on CBDCs and cash from a recent ECB Forum. Of note in Powell’s remarks was his insistence on patience and his emphasis that CBDCs “must be done in a way where they do not affect [physical] cash or other private digital currencies.” Keroles made a great observation about Powell’s position being analogous to the innovator’s dilemma. Lagarde follows Powell’s lead and reiterates a commitment to cash, but in a less convincing manner, and
Though not the oldest form of currency, some form of shell money appears to have been found on almost every continent. The shell most widely used worldwide as currency was the shell of Cypraea moneta, the money cowry.