WEBVTT - Evolving Money: Money Without Borders (Sponsored Content)

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<v Speaker 1>Since you're a subscriber to this Bloomberg podcast, we thought

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<v Speaker 1>you'd be interested in a new four episode sponsored podcast

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<v Speaker 1>called Evolving Money, produced by Coinbase and Bloomberg Media Studios.

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<v Speaker 1>It explores some of the monetary system's biggest changes over

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<v Speaker 1>the centuries and today's companies that are making big bets

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<v Speaker 1>that cryptocurrency could be money's next evolution. You can subscribe

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<v Speaker 1>wherever you listen to your favorite podcasts. Here's a recent episode.

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<v Speaker 2>Last year, I went to France on a climbing trip.

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<v Speaker 2>Scaling mountains takes a toll, of course, but I was

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<v Speaker 2>prepared for that. The unpleasant surprise was the experience of

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<v Speaker 2>managing my money. There was so much friction involved in

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<v Speaker 2>converting and spending my US dollars in another country away

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<v Speaker 2>from home. Well, frankly, I could have started a small

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<v Speaker 2>fire at the top of the mountain to change dollars

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<v Speaker 2>into euros. Well, first you need to find a bank

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<v Speaker 2>that's open. Once you've done that, you need to stand

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<v Speaker 2>in line, pay a fee, and then try not to

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<v Speaker 2>blanch when you see that usually highly unfavorable exchange rate.

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<v Speaker 2>If you use your credit card in an ATM, which

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<v Speaker 2>you can, of course, you pay an ATM user fee,

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<v Speaker 2>plus a foreign transaction fee, plus a service charge depending

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<v Speaker 2>on the card, and then there's that appalling exchange rate again.

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<v Speaker 2>Of course, I could have exchanged dollars for euros before

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<v Speaker 2>I left, but then I'd have to weather the risk

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<v Speaker 2>of taken a huge amount of cash with me to

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<v Speaker 2>the airport and keeping it on my person as I

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<v Speaker 2>navigated a foreign country. So mostly I just paid for

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<v Speaker 2>everything with my American credit card, which worked fine and

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<v Speaker 2>felt friction free, but just a glance at my statement

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<v Speaker 2>showed it was anything But fees are binded on both

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<v Speaker 2>ends of my transactions, as if I'd been taken a

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<v Speaker 2>toll road every time I threw down my plastic. That

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<v Speaker 2>convenience came at a cost. I don't begrudge paying someone

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<v Speaker 2>who provides a service, but these days, when it can

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<v Speaker 2>be so easy and inexpensive to travel across the globe,

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<v Speaker 2>that we're still paying fees like we did last century. Frankly,

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<v Speaker 2>I think we can do better, and I'm not alone

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<v Speaker 2>in that. From Coinbase and Bloomberg Media Studios, this is

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<v Speaker 2>evolving money, and I'm your host, Patty Hirsch. On this podcast,

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<v Speaker 2>we'll be taking a different look at cryptocurrency. It's been

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<v Speaker 2>cast as a radical departure for the monetary system, But

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<v Speaker 2>what if it wasn't radical at all, just the next

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<v Speaker 2>logical evolution of how we pay for things and store

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<v Speaker 2>long term value. Along the way, we'll explore how money

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<v Speaker 2>has changed over the centuries look for lessons that might

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<v Speaker 2>predict its next evolution. Throughout history, financial markets have struggled

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<v Speaker 2>with the issue of borders. Borders create friction, add cost,

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<v Speaker 2>and cause headaches for anyone who wants to spend money

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<v Speaker 2>across them. On top of that, various national currencies can

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<v Speaker 2>be wildly unstable. So could a borderless global currency ease

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<v Speaker 2>friction and enhance financial inclusion and stability around the world.

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<v Speaker 2>Cryptocurrencies offer an intriguing possible solution to money's border problem,

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<v Speaker 2>and a particular kind of cryptocurrency called stable coins, could

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<v Speaker 2>become a powerful medium of exchange for international payments and

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<v Speaker 2>offer people around the world economic freedom. In a bit,

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<v Speaker 2>will be joined by Brian Armstrong, co founder and CEO

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<v Speaker 2>of Coinbase, as we ask could cryptocurrencies be the future

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<v Speaker 2>of global money? First, I'll be joined by Jacob Goldstein,

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<v Speaker 2>author of Money, The True Story of a Made Up Thing.

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<v Speaker 2>The issue of borders has long been a perplexing one

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<v Speaker 2>for our monetary system, and it's not even limited to

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<v Speaker 2>international borders. In the not too distant past, it was

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<v Speaker 2>a big issue within the borders of the United States.

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<v Speaker 2>The eighteen thirties, eighteen forties, or kind of was peak

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<v Speaker 2>wild amounts of money in the United States. This is

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<v Speaker 2>Jacob Golds. How many kinds of money did America have

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<v Speaker 2>back then?

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<v Speaker 3>There were thousands of kinds of money, right, you're not

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<v Speaker 3>indulging in hyperbole here. At one point in the eighteen

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<v Speaker 3>hundreds in the United States there were eight thousand, three

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<v Speaker 3>hundred and seventy different kinds of paper money in circulation

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<v Speaker 3>in the United.

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<v Speaker 2>States of America. And why did America have eighty three

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<v Speaker 2>hundred and seventy different kinds of money? Well, it was

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<v Speaker 2>all about what else trust. In the early eighteen hundreds,

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<v Speaker 2>Americans had become skeptical of the Bank of the United States,

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<v Speaker 2>which was a financial monopoly, the country's only national bank.

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<v Speaker 2>After President Andrew Jackson decided to kill that bank, the

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<v Speaker 2>only chartered banks that existed did so at the state level.

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<v Speaker 2>Eighty three hundred and seventy different local banks with eight thousand,

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<v Speaker 2>three hundred and seventy different currencies, which made things complicated.

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<v Speaker 2>If you're traveling from I don't know, California to Kentucky

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<v Speaker 2>and you've got a pocketload of Sacramento Bank printed money

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<v Speaker 2>and you're showing up to Kentucky and trying to spend

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<v Speaker 2>it in a general store, how did that go down?

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<v Speaker 4>I mean bad, bad is for there are these sort

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<v Speaker 4>of notorious cases of people, you know, just kind of

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<v Speaker 4>getting hosed and nobody knows what their money is.

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<v Speaker 2>Talk about friction. The storekeeper behind the counter would look

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<v Speaker 2>at your bill and would have to flip through a

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<v Speaker 2>big fat periodical to verify that it even came from

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<v Speaker 2>a real bank. More problematic, the value of each currency

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<v Speaker 2>fluctuated too. Currencies were given discounts based on the distance

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<v Speaker 2>to the bank and also based on the bank's financial health,

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<v Speaker 2>which was constantly changing. And how did that affect commerce?

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<v Speaker 2>Travelers did you.

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<v Speaker 3>Know, lose something when they exchanged paper money, something like

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<v Speaker 3>one or two percent.

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<v Speaker 2>When the Civil War broke out, the federal government needed

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<v Speaker 2>to raise money to fund the war effort, and this

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<v Speaker 2>led to the re establishment of national banks and drove

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<v Speaker 2>Americans towards the one single currency. We now know the

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<v Speaker 2>days of thousands of different kinds of money were over,

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<v Speaker 2>but we can draw important lessons from that chaotic time,

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<v Speaker 2>Bobre just like, I guess that's the way money is.

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<v Speaker 5>I guess there's just eight thousand kinds of money in America,

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<v Speaker 5>And like that kind of neta lesson of like, oh right,

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<v Speaker 5>there's all these different ways that money can be, has been,

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<v Speaker 5>will be. It's just a really useful thing to keep

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<v Speaker 5>in mind. Hopefully the days of thousands of different types

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<v Speaker 5>of banknotes are over for good, but today's global monetary

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<v Speaker 5>system can feel every bit as head spinning and as

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<v Speaker 5>full of friction as eighteen hundreds of America. Across the

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<v Speaker 5>world today, there are one hundred and eighty different official

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<v Speaker 5>national currencies. Almost all of them are what are called

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<v Speaker 5>fiat currencies, backed not by a commodity like gold or silver,

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<v Speaker 5>but simply by the relationship between supply and demand and

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<v Speaker 5>the ability of the issuing government. And while the world's

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<v Speaker 5>more connected than ever, moving money across borders is still

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<v Speaker 5>slow and expensive. Take remittance fees, which are astronomically high.

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<v Speaker 5>Americans spend around twelve billion dollars a year in fees

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<v Speaker 5>just to send money to friends and family abroad. Those

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<v Speaker 5>remittance fees are a huge problem when about one in

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<v Speaker 5>nine people globally depend on workers living abroad. Business to

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<v Speaker 5>business cross border payments are expensive too, and those costs

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<v Speaker 5>stifle global commerce. And on top of all of that,

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<v Speaker 5>currencies can fluctuate wildly, and that brings us to Argentina.

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<v Speaker 5>Beginning in twenty seventeen, the Argentine peso began to suffer

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<v Speaker 5>wild annual inflation rates. Each year was worse than the previous,

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<v Speaker 5>with annual inflation eventually hitting two hundred and eleven percent

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<v Speaker 5>at the end of twenty twenty three. When Argentinians began

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<v Speaker 5>seeing the value of their savings depreciate to almost nothing,

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<v Speaker 5>they started buying US dollars as a safeguard.

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<v Speaker 6>The way to head against inflation is getting two dollars.

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<v Speaker 2>That's Eduardo Novo Estrata, CEO and co founder of agro Token.

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<v Speaker 2>And by the way, you should know that coinbase has

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<v Speaker 2>no financial relationship with agro tooken.

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<v Speaker 6>So imagine all the people who were rushing to buy dollars. Basically,

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<v Speaker 6>they got their salary at the end of the month

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<v Speaker 6>and they were rushing to buy dollars. But then the

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<v Speaker 6>government were running out of dollars. So what they did

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<v Speaker 6>is what they said, Okay, you cannot buy more than

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<v Speaker 6>two hundred dollars a month.

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<v Speaker 2>Two hundred bucks a month. Wow, that's not much.

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<v Speaker 6>Two hundred bucks a Yeah, that opened up a big

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<v Speaker 6>black market.

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<v Speaker 2>Today. Because of that limit, lines and wait times at

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<v Speaker 2>the bank for dollars are interminable, and transaction fees are costly.

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<v Speaker 6>People had to get very creative again to get dollars.

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<v Speaker 2>Many Argentinians acquire US dollars through black markets where the

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<v Speaker 2>exchange rates are two times better than the officially sanctioned exchanges,

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<v Speaker 2>and then they effectively store the cash under their mattresses,

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<v Speaker 2>ensuring its value cannot depreciate should hyperinflation continue.

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<v Speaker 7>I spent about a year living in Buenos Aires, Argentina,

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<v Speaker 7>and it was the first time I had seen a

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<v Speaker 7>society that had gone through hyperinflation, and that was pretty

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<v Speaker 7>eye opening.

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<v Speaker 2>That's Brian Armstrong, CEO of Coinbase.

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<v Speaker 7>It affected the society in all sorts of small and

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<v Speaker 7>big ways. You know, in small ways, for instance, you'd

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<v Speaker 7>see on menus when you go to restaurants, the menu

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<v Speaker 7>would sort of have a sticker on top where they'd

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<v Speaker 7>put a new price every few days on the menu

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<v Speaker 7>because the prices would keep going up that fast, they

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<v Speaker 7>didn't want to have to print new menus every few days.

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<v Speaker 7>And I remember at that time there was it was

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<v Speaker 7>difficult for people to ride the bus, you know, I

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<v Speaker 7>guess the bus only took physical coins that you put

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<v Speaker 7>in there to ride the bus, and coins actually became

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<v Speaker 7>somewhat scarce because you had to you had to bring

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<v Speaker 7>like a whole handful of coins just to have enough

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<v Speaker 7>to ride the bus. But in a deeper and more

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<v Speaker 7>profound way, I think it sort of created this pessimism

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<v Speaker 7>about the future. In the early nineteen hundreds, Argentina was

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<v Speaker 7>one of the to up ten economies in the world.

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<v Speaker 7>It was like the Paris of South America. And over

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<v Speaker 7>a period of one hundred years or so, they've now

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<v Speaker 7>fallen to, you know, less than one hundred in the

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<v Speaker 7>world in terms of their economy, and it's basically been

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<v Speaker 7>by a series of policies, you know, around corruption and

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<v Speaker 7>lack of economic freedom. When I say economic freedom, by

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<v Speaker 7>the way, I mean in some ways it's about free trade,

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<v Speaker 7>it's about sound money, it's about enforcing private property rights,

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<v Speaker 7>you know, it's about reducing corruption and things like this.

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<v Speaker 2>Pessimism and lack of trust and an unstable financial system

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<v Speaker 2>isn't just an Argentinian story. Hyperinflation has recently hit Turkey, Egypt, Venezuela,

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<v Speaker 2>Sudan and Zimbabwe. Turmoil makes it even harder to move

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<v Speaker 2>money across borders. Brian saw money as border problems firsthand

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<v Speaker 2>while working at Airbnb over a decade ago. The vacation

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<v Speaker 2>rental startup was looking to expand, which naturally meant a

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<v Speaker 2>lot of international transactions.

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<v Speaker 7>I saw how difficult it was for Airbnb to move

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<v Speaker 7>money into an out of one hundred ninety countries around world,

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<v Speaker 7>and I kind of had a front row seat into

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<v Speaker 7>how how much of a passwork quill it, how broken

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<v Speaker 7>the global financial system was to move money into all

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<v Speaker 7>these countries and receive it from those countries. That was

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<v Speaker 7>like delays and fees.

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<v Speaker 2>The Internet has introduced a global borderless system of information sharing,

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<v Speaker 2>but the system from moving money internationally hasn't coughed up yet.

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<v Speaker 2>Think about the Internet.

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<v Speaker 7>Right when you're loading a website or you're sending a

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<v Speaker 7>message to somebody, you don't think about what country they're

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<v Speaker 7>in at that time. If I'm loading a website in

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<v Speaker 7>the UK, I don't expect to pay an exchange rate,

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<v Speaker 7>you know, when the website comes in from the UK

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<v Speaker 7>to load into my American browser. Imagine if you had

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<v Speaker 7>to pay an exchange fee at the border to load

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<v Speaker 7>a UK website or something.

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<v Speaker 2>It would be silly.

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<v Speaker 7>And when I send people WhatsApp messages, you know, it's

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<v Speaker 7>instant and it's free anywhere that they are in the world.

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<v Speaker 7>So why can't payments be like that. There's no technological

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<v Speaker 7>reason why we can't do that. It is purely a

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<v Speaker 7>matter of will and inertia, and you know, politics and

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<v Speaker 7>things like that.

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<v Speaker 2>And Brian began to see it potential solution to the

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<v Speaker 2>problem when he read Satoshi Nakamoto's Bitcoin white paper.

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<v Speaker 7>Living in Argentina was one of the pieces of the

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<v Speaker 7>puzzle that clicked in my mind. When I finally read

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<v Speaker 7>that Bitcoin white paper about what it might be like

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<v Speaker 7>to return to sound money globally, I saw crypto as

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<v Speaker 7>a very liberating force for the world, to make the

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<v Speaker 7>world more interconnected and fair and free. When I read

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<v Speaker 7>the Bitcoin white paper, I said, Okay, this is exciting

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<v Speaker 7>as a potential solution, but it's it's a long ways off,

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<v Speaker 7>you know, what could happen? How could I help make

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<v Speaker 7>this happen? And so I kind of couldn't help myself.

0:12:29.960 --> 0:12:32.640
<v Speaker 7>I started on nights and weekends working on a prototype,

0:12:32.920 --> 0:12:35.000
<v Speaker 7>and I realized, like, if this technology is ever going

0:12:35.040 --> 0:12:36.920
<v Speaker 7>to be used by people, would have to make it

0:12:37.520 --> 0:12:41.240
<v Speaker 7>more trusted and easier to use for the average person,

0:12:41.280 --> 0:12:44.080
<v Speaker 7>who you know, didn't understand how cryptography worked or the

0:12:44.080 --> 0:12:47.280
<v Speaker 7>technical details. I started working on a prototype that would

0:12:47.280 --> 0:12:49.959
<v Speaker 7>be a simple way for people to use bitcoin, and

0:12:50.280 --> 0:12:52.240
<v Speaker 7>that became That became coinbase.

0:12:52.520 --> 0:12:56.720
<v Speaker 2>Brian was inspired by the idea that cryptocurrencies could have

0:12:56.880 --> 0:13:00.560
<v Speaker 2>true utility in day to day transactions and could even

0:13:00.559 --> 0:13:02.000
<v Speaker 2>make the global economy freer.

0:13:02.440 --> 0:13:06.040
<v Speaker 7>It's a decentralized form of money that is provably scarce,

0:13:06.720 --> 0:13:09.679
<v Speaker 7>and that was a very powerful idea for many reasons.

0:13:09.679 --> 0:13:12.640
<v Speaker 7>But if you apply it through the Argentina lens, it's

0:13:12.640 --> 0:13:16.199
<v Speaker 7>powerful because the temptation in many of these countries when

0:13:16.240 --> 0:13:18.760
<v Speaker 7>you have a fiat currency that's not backed by any

0:13:18.800 --> 0:13:22.280
<v Speaker 7>hard commodity, is for the government to inflate the money

0:13:22.320 --> 0:13:26.320
<v Speaker 7>supply and have deficit spending and inflation. What would it

0:13:26.360 --> 0:13:28.760
<v Speaker 7>mean for the world if everybody could sort of return

0:13:28.800 --> 0:13:31.720
<v Speaker 7>to sound money, or have sound money that couldn't be

0:13:31.760 --> 0:13:35.680
<v Speaker 7>manipulated or abused by folks in government and various countries

0:13:35.720 --> 0:13:37.880
<v Speaker 7>around the world. That would be an incredible tool for

0:13:37.920 --> 0:13:38.680
<v Speaker 7>economic freedom.

0:13:39.040 --> 0:13:40.920
<v Speaker 2>We talk about signed money in the gold standard, but

0:13:41.000 --> 0:13:42.480
<v Speaker 2>I mean there was a reason we moved away from

0:13:42.480 --> 0:13:44.440
<v Speaker 2>the gold standard because we find that it wasn't particularly

0:13:44.520 --> 0:13:48.440
<v Speaker 2>signed and it was particularly volatile and particularly disruptive to economies.

0:13:48.520 --> 0:13:50.160
<v Speaker 2>So can you square that one for me?

0:13:50.600 --> 0:13:54.160
<v Speaker 7>Yeah, Well, so there's a debate about volatility, which kind

0:13:54.200 --> 0:13:56.840
<v Speaker 7>of goes back to the Great Depression and sort of

0:13:56.840 --> 0:13:59.719
<v Speaker 7>Canesian economics. That's sort of the question of should we

0:13:59.760 --> 0:14:03.120
<v Speaker 7>have a federal reserve that can change interest rates? And

0:14:03.160 --> 0:14:05.480
<v Speaker 7>that's a whole interesting topic on its own. It gives

0:14:05.520 --> 0:14:08.400
<v Speaker 7>you enormous soft power, and it gives you the ability

0:14:08.400 --> 0:14:10.320
<v Speaker 7>to buy the way, you know, inflate the money supply

0:14:10.360 --> 0:14:13.680
<v Speaker 7>and purchase things without devaluing your currency too much because

0:14:13.679 --> 0:14:16.240
<v Speaker 7>it is the reserve currency. But like every one of

0:14:16.320 --> 0:14:20.640
<v Speaker 7>those empires before us, you know, as the empire kind

0:14:20.640 --> 0:14:24.360
<v Speaker 7>of hits the peak, you start to see excessive debt,

0:14:24.480 --> 0:14:28.920
<v Speaker 7>excessive inflation. Crypto is many things to many people. Bitcoin,

0:14:28.960 --> 0:14:31.320
<v Speaker 7>I would say is specifically a is sort of a

0:14:31.400 --> 0:14:34.680
<v Speaker 7>return to the gold standard in a digital form that

0:14:34.800 --> 0:14:37.760
<v Speaker 7>is more portable and divisible than gold, and that's a

0:14:37.760 --> 0:14:38.880
<v Speaker 7>really powerful idea.

0:14:39.040 --> 0:14:41.760
<v Speaker 2>To Brian, the most powerful idea of all is the

0:14:41.800 --> 0:14:46.040
<v Speaker 2>idea that crypto could offer economic freedom, and he's convinced

0:14:46.320 --> 0:14:48.720
<v Speaker 2>that the tool to make that a reality is here

0:14:49.280 --> 0:14:52.600
<v Speaker 2>in the form of a type of cryptocurrency cold stable coins.

0:14:53.760 --> 0:14:55.920
<v Speaker 7>So there's a couple different forms of stable coins, but

0:14:55.960 --> 0:14:59.920
<v Speaker 7>the simplest one is a digitized dollar. It's backed one

0:15:00.160 --> 0:15:03.120
<v Speaker 7>one by a dollar being held in a US bank

0:15:03.240 --> 0:15:07.240
<v Speaker 7>or trust company. Often they're held in US treasuries, right,

0:15:07.320 --> 0:15:09.840
<v Speaker 7>which is kind of the lowest risk item you could have.

0:15:10.640 --> 0:15:14.280
<v Speaker 7>And it's important that we have stable coins because, again

0:15:14.320 --> 0:15:16.480
<v Speaker 7>I mentioned earlier, crypto is a technology to update the

0:15:16.480 --> 0:15:19.920
<v Speaker 7>financial system, and payments are a big source of friction.

0:15:20.040 --> 0:15:23.280
<v Speaker 7>So you can now send, for instance, usd coin on

0:15:23.360 --> 0:15:26.400
<v Speaker 7>a layer two called base for free instantly anywhere in

0:15:26.400 --> 0:15:29.160
<v Speaker 7>the world. It'll settle in a few seconds. That's a

0:15:29.160 --> 0:15:32.360
<v Speaker 7>game changer because payments flow to the path of least resistance,

0:15:32.440 --> 0:15:35.200
<v Speaker 7>kind of like water. We want to reduce friction in

0:15:35.240 --> 0:15:39.400
<v Speaker 7>our economy so that more transactions can take place.

0:15:39.800 --> 0:15:43.040
<v Speaker 2>Brian says stable coins are as stable as US dollars,

0:15:43.320 --> 0:15:46.880
<v Speaker 2>but with all the benefits of crypto. Transactions are fast,

0:15:47.080 --> 0:15:51.120
<v Speaker 2>cheap and secure, and they're accessible to anyone with Internet access,

0:15:51.120 --> 0:15:53.320
<v Speaker 2>which means that they can function as a stable currency

0:15:53.320 --> 0:15:57.120
<v Speaker 2>alternative for those who don't have access to stable feit currencies.

0:15:57.840 --> 0:16:00.960
<v Speaker 2>In recent years, the popularity of stable coins is skyrocketed

0:16:01.280 --> 0:16:03.920
<v Speaker 2>as a way for people in countries like Argentina to

0:16:04.040 --> 0:16:07.440
<v Speaker 2>safely store their money in a digital currency. I discussed

0:16:07.440 --> 0:16:08.320
<v Speaker 2>this with Eduardo.

0:16:08.840 --> 0:16:11.480
<v Speaker 6>When you have restrictions even to buy dollars, what do

0:16:11.480 --> 0:16:14.920
<v Speaker 6>you do? You know, you go to something that you

0:16:14.960 --> 0:16:20.320
<v Speaker 6>can hedge against inflation and evaluations and is something that

0:16:20.360 --> 0:16:23.480
<v Speaker 6>people start believing. So that's why there's a lot of

0:16:23.480 --> 0:16:27.320
<v Speaker 6>adoption of blockchain and cryptocurrency in Argentina.

0:16:27.480 --> 0:16:30.160
<v Speaker 2>Stable coins are safe from the inflation of the Argentine

0:16:30.200 --> 0:16:32.960
<v Speaker 2>peso and safe from having to navigate the US dollar

0:16:33.000 --> 0:16:36.880
<v Speaker 2>cash market, and that reliability is welcome in any place

0:16:36.960 --> 0:16:41.520
<v Speaker 2>experiencing hyperinflation. Nigeria, for example, is another country where people

0:16:41.680 --> 0:16:45.000
<v Speaker 2>turn to stable coins for protection and stability and to

0:16:45.040 --> 0:16:46.359
<v Speaker 2>make day to day transactions.

0:16:46.960 --> 0:16:49.920
<v Speaker 7>There's quite a few people in those markets who they

0:16:50.000 --> 0:16:54.119
<v Speaker 7>essentially are just holding USD stable coins on their smartphones

0:16:54.120 --> 0:16:57.120
<v Speaker 7>now as their primary way of using financial services. They're

0:16:57.120 --> 0:16:59.760
<v Speaker 7>doing it for peer to peer payments, like to send

0:16:59.800 --> 0:17:02.280
<v Speaker 7>money to friends and family, whether they're in the same

0:17:02.360 --> 0:17:04.879
<v Speaker 7>country or not. They're also using it for B to

0:17:04.960 --> 0:17:07.320
<v Speaker 7>B type commerce, like, you know, if they need to

0:17:07.440 --> 0:17:11.520
<v Speaker 7>order goods and supplies from Europrasia to stock their shelves

0:17:12.080 --> 0:17:14.840
<v Speaker 7>in their store, they can make those payments now with

0:17:14.960 --> 0:17:18.080
<v Speaker 7>USDC stable coins and do it fast and cheap and

0:17:18.280 --> 0:17:20.520
<v Speaker 7>cross border in a way that's just not available to

0:17:20.560 --> 0:17:21.359
<v Speaker 7>them any other way.

0:17:21.920 --> 0:17:24.720
<v Speaker 2>But the emergence of stable coins hasn't been an altogether

0:17:24.800 --> 0:17:28.760
<v Speaker 2>smooth ride. One area of economic freedom that people blanchet

0:17:28.800 --> 0:17:32.720
<v Speaker 2>a little bit is the idea that cryptocurrency is being

0:17:32.800 --> 0:17:38.880
<v Speaker 2>used by criminal organizations to facilitate their business. What's what's

0:17:38.880 --> 0:17:40.280
<v Speaker 2>your what are your thoughts about that?

0:17:40.680 --> 0:17:43.640
<v Speaker 7>Yeah, So, unfortunately there's a lot of misinformation out there

0:17:43.680 --> 0:17:47.000
<v Speaker 7>about this topic. If you look at the best third

0:17:47.000 --> 0:17:49.840
<v Speaker 7>party data that we've been able to find using blockshing

0:17:49.880 --> 0:17:53.600
<v Speaker 7>analytics companies, they publish reports on this every year, and

0:17:53.840 --> 0:17:56.600
<v Speaker 7>it looks like all illicit activity in crypto is about

0:17:56.640 --> 0:17:57.920
<v Speaker 7>half of one percent.

0:17:57.880 --> 0:18:01.159
<v Speaker 2>Global money laundering transactions mean why well are estimated at

0:18:01.200 --> 0:18:03.560
<v Speaker 2>two to five percent of global GDP.

0:18:03.680 --> 0:18:06.560
<v Speaker 7>Companies like coinbase. You know, we work closely with law enforcement.

0:18:07.000 --> 0:18:09.800
<v Speaker 7>So what a lot of criminals have realized actually is

0:18:09.800 --> 0:18:12.120
<v Speaker 7>that crypto is a really terrible choice if you want

0:18:12.160 --> 0:18:15.400
<v Speaker 7>to do a listed activity because your transactions are being

0:18:15.440 --> 0:18:16.760
<v Speaker 7>tracked on a public ledger.

0:18:17.359 --> 0:18:20.240
<v Speaker 2>That transparency is part of the reason why Brian believes

0:18:20.280 --> 0:18:23.359
<v Speaker 2>stable coins can drive quality of life improvements across the

0:18:23.359 --> 0:18:26.680
<v Speaker 2>globe and act as a human rights tool Beyond inflation

0:18:26.720 --> 0:18:31.439
<v Speaker 2>affected countries, freedom over finances correlates with overall freedom, and

0:18:31.480 --> 0:18:35.080
<v Speaker 2>in countries that suffer from socio political upheaval, governments can

0:18:35.160 --> 0:18:38.960
<v Speaker 2>treat access to traditional financial services as a censorship tool.

0:18:39.760 --> 0:18:43.160
<v Speaker 2>Banking access is another area of inequality. There are more

0:18:43.160 --> 0:18:46.160
<v Speaker 2>than seven billion smartphones in the world, but far fewer

0:18:46.200 --> 0:18:49.399
<v Speaker 2>bank accounts. More than a billion people are still unbanked,

0:18:49.760 --> 0:18:52.240
<v Speaker 2>but now many of them have the technology to access

0:18:52.320 --> 0:18:55.880
<v Speaker 2>digital currencies right in their hands, and that could change

0:18:55.880 --> 0:18:59.960
<v Speaker 2>people's lives everywhere, including as Eduardo says, in Argentina.

0:19:00.200 --> 0:19:03.320
<v Speaker 6>We foresee more use of these because the people they

0:19:03.320 --> 0:19:04.439
<v Speaker 6>don't have a way of saving.

0:19:04.960 --> 0:19:07.359
<v Speaker 2>Giving more people the financial infrastructure they need is the

0:19:07.400 --> 0:19:10.680
<v Speaker 2>mission of agro Token, which Eduardo funded in twenty twenty one.

0:19:11.240 --> 0:19:14.359
<v Speaker 2>Agrotoken creates stable coins that are backed not by US

0:19:14.400 --> 0:19:17.920
<v Speaker 2>dollars but by grain. The end goal, though, is the same.

0:19:18.480 --> 0:19:22.919
<v Speaker 6>We are giving the people the opportunity to hedge against

0:19:23.000 --> 0:19:28.160
<v Speaker 6>inflation and evaluation and they won't be so much exposed

0:19:28.800 --> 0:19:34.280
<v Speaker 6>the decisions of the government about you know, macroeconomics, economy

0:19:34.640 --> 0:19:35.160
<v Speaker 6>or whatever.

0:19:35.640 --> 0:19:38.880
<v Speaker 2>This bold vision of economic freedom is one he shares

0:19:39.280 --> 0:19:39.800
<v Speaker 2>with Brian.

0:19:40.280 --> 0:19:43.040
<v Speaker 7>If you have a smartphone and an Internet connection, you

0:19:43.160 --> 0:19:46.840
<v Speaker 7>now can have world class financial infrastructure. You can have

0:19:46.880 --> 0:19:50.719
<v Speaker 7>property rights, you can have access to sound money that

0:19:50.720 --> 0:19:53.960
<v Speaker 7>can't be eroded via inflation or seized if you're a

0:19:53.960 --> 0:19:57.400
<v Speaker 7>refugee fleeing at the border. And so it's a really

0:19:57.400 --> 0:20:00.159
<v Speaker 7>powerful idea actually that crypto could increase the and I'm

0:20:00.280 --> 0:20:03.280
<v Speaker 7>freedom of the world. So crypto is sort of saying, hey, well,

0:20:03.520 --> 0:20:06.120
<v Speaker 7>we have the Internet now, and we have smartphones, why

0:20:06.119 --> 0:20:09.480
<v Speaker 7>can't we provide financial infrastructure to everybody in a new

0:20:09.600 --> 0:20:13.040
<v Speaker 7>updated financial system. That could be an incredible tool to

0:20:13.119 --> 0:20:16.040
<v Speaker 7>lift the world out of poverty and increase economic growth

0:20:16.280 --> 0:20:18.040
<v Speaker 7>and all kinds of tools like that.

0:20:20.000 --> 0:20:23.439
<v Speaker 2>Even the biggest skeptics can agree a new technology that

0:20:23.480 --> 0:20:27.119
<v Speaker 2>can increase economic growth and economic freedom to more people

0:20:27.119 --> 0:20:30.600
<v Speaker 2>around the world is worth giving a chance. When it

0:20:30.640 --> 0:20:33.400
<v Speaker 2>comes to our financial system, we've seen time and time

0:20:33.440 --> 0:20:36.159
<v Speaker 2>again that there is always a better way and that

0:20:36.320 --> 0:20:42.560
<v Speaker 2>money always evolves. Thank you to Jacob Goldstein, Eduardo Novello,

0:20:42.720 --> 0:20:47.600
<v Speaker 2>Estrata and Brian Armstrong. This has been Season one of

0:20:47.600 --> 0:20:52.240
<v Speaker 2>Evolving Money, a podcast from Coinbase and Bloomberg Media Studios.

0:20:52.640 --> 0:20:54.359
<v Speaker 2>I'm Patti Hirsh. Thanks for listening.