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Speaker 1: Hello, Odd Lots listeners. It's Joe Wisenthal. Before we get

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Speaker 1: to today's episode, I wanted to let you know that

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Speaker 1: we recorded this interview with Rowan Gray back in early

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Speaker 1: in March, so things have obviously changed quite a bit

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Speaker 1: since then. What we thought the interview was still an

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Speaker 1: important one to run, and actually it's quite a bit

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Speaker 1: to say about the role of money as it relates

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Speaker 1: to government, questions of privacy, all things that are going

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Speaker 1: to be important. So we wanted to get it out.

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Speaker 1: But if it doesn't sound exactly timely with the news,

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Speaker 1: now you know why. Thanks for listening. Hello, and welcome

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Speaker 1: to another episode of the Odd Lots Podcast. I'm Joe

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Speaker 1: Wisenthal and I'm Tracy all Away. Uh, Tracy, how are things?

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Speaker 1: How are things holding up there in Hong Kong these days?

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Speaker 1: I don't know what to say. Most people are still

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Speaker 1: wearing face masks, lots of people are working from home.

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Speaker 1: I guess it just feels more normal nowadays, so normal ish,

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Speaker 1: like more normal than it was, say, like a month ago. Yeah,

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Speaker 1: but I can't figure out whether or not it's actually

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Speaker 1: getting back to normal or this has just become the

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Speaker 1: new normal. There are there are a lot of like

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Speaker 1: extraordinary stories that we've been reading about things going on

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Speaker 1: in China in Asia as people and government to deal

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Speaker 1: with this virus. And one story that's probably not the

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Speaker 1: most important story of all of it, but that was interesting,

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Speaker 1: was the story about the government literally laundering cash. Yeah,

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Speaker 1: that's right. So in order to help mitigate the spread

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Speaker 1: of the coronavirus, there was a moment when the Chinese

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Speaker 1: government was sanitizing it's actually cash bills, and it was

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Speaker 1: doing it with I think it was with uv light,

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Speaker 1: but money laundering, as you say, literally literal laundering of money.

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Speaker 1: But by large, like although obviously cash exists, and cash

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Speaker 1: exists in Hong Kong, etcetera, mainland China and Hong Kong

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Speaker 1: are probably among the most forward economies in terms of

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Speaker 1: really becoming a post cash society. Yeah, I think that's right.

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Speaker 1: I think I've told you stories before of me going

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Speaker 1: to Beijing and just being almost unable to purchase stuff

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Speaker 1: with cash. When you try to pay for coffee at Starbucks,

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Speaker 1: for instance, with actual money, the cash register lady tends

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Speaker 1: to give you this sort of look of despair and

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Speaker 1: have to go to the back room and pull out

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Speaker 1: a little plastic bag with with change in it because

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Speaker 1: no one else pays it that way. And in the

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Speaker 1: coronavirus outbreak, there's actually an argument that the digital realization

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Speaker 1: of money in China was a good thing because it

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Speaker 1: meant that people could still pay for stuff through apps,

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Speaker 1: money could still flow through the system, and of course

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Speaker 1: people didn't have to touch all those dirty physical bills. Yeah,

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Speaker 1: I mean, it feels like there's a few different angles

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Speaker 1: of this. So one, as you mentioned and um uh

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Speaker 1: we just discussed, bills could in theory be a vehicle

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Speaker 1: for transmitting the virus. There was also an interesting story

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Speaker 1: a few weeks ago I recall about how authorities in

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Speaker 1: Hubei Province, where Wuhan is the real epicenter of the virus,

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Speaker 1: we're able to basically track everyone who had bought cold

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Speaker 1: medicine uh in the entire province or in the entire city.

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Speaker 1: And it struck me that that is one of those

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Speaker 1: things you can only do if you have a very

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Speaker 1: highly centralized database of essentially every transaction there is, every purchase,

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Speaker 1: and be able to tie that to some individual. Yeah,

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Speaker 1: a digital database combined with an intensely powerful surveillance system

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Speaker 1: of government short Yeah, So regardless, we are moving and

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Speaker 1: you know, this this episode is not really going to

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Speaker 1: be about the virus per se, but it is emblematic

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Speaker 1: of where we're all going as a society, maybe a

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Speaker 1: different speedies, which is that physical cash is on the

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Speaker 1: way out, and certainly with so much commerce going digital,

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Speaker 1: where there's no such thing as cash in the digital

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Speaker 1: realm for the most part, excluding sort of U independent cryptocurrencies,

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Speaker 1: cash is kind of a dying thing. I think that's

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Speaker 1: definitely an open question, and I think there is as

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Speaker 1: you say, this move to electronic transactions, Uh, definitely, China

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Speaker 1: is at the vanguard of this, and it does open

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Speaker 1: up the question of what's the role of cash in

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Speaker 1: that kind of society in the future. You know, is

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Speaker 1: it going to be like the Starbucks in Beijing where

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Speaker 1: people have to go to a back room to sort

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Speaker 1: of search for coins to give you change because no

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Speaker 1: one else is using it, right, And you know, we

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Speaker 1: see this push towards cash in different ways. So there's

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Speaker 1: the sort of emergent phenomenon which is just hey, app

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Speaker 1: payment apps are cool. I like paying for things on

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Speaker 1: Apple Pay on my phone. It's extremely convenient. There's aggressive

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Speaker 1: pushes among some sort of intellectual elite to reduce the

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Speaker 1: amount of cash and society. The economist Ken Rogoff wrote

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Speaker 1: an entire book basically about why we should get rid

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Speaker 1: of cash. He had a few arguments. One, it's like

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Speaker 1: it's used in crime more than digital money. It also, uh,

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Speaker 1: if we don't have cash, you can't take your money

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Speaker 1: out of the bank put under your mattress. That makes

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Speaker 1: it easier to impose negative interest rates. In India a

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Speaker 1: couple of years ago, in sixteen, we know there was

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Speaker 1: the big demonitization campaign where they suddenly forced everyone to

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Speaker 1: convert their high dollar bills. That has had mixed success

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Speaker 1: at best, I believe. But whatever it is, whether it's

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Speaker 1: sort of an emergent phenomenon or very intentional push by elites,

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Speaker 1: there is this sort of disappearance of the significance of

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Speaker 1: cash in the economy. Sure, is that what we're going

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Speaker 1: to be talking about today? It is, And I think

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Speaker 1: the key question we're going to explore today is just

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Speaker 1: because it's happening, is this good? And do people really

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Speaker 1: want this? Do people really realize what they're losing with cash?

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Speaker 1: And is there a danger in society if one day

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Speaker 1: we wake up and there's no cash, and everything is

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Speaker 1: just purely uh in our bank accounts. Yeah, and I

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Speaker 1: think that gets back to the surveillance question. Of course,

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Speaker 1: when it comes to the coronavirus, it might be a

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Speaker 1: good thing that China contract all the cold medicine purchases

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Speaker 1: because people were paying for them by apps and electronically.

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Speaker 1: But maybe when it comes to some other stuff, you

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Speaker 1: wouldn't necessarily want the government to be able to see

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Speaker 1: your entire purchase history. So big questions. That is exactly right. So,

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Speaker 1: without further ado, I want to bring in our guest

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Speaker 1: for today. He's Rowan Gray, poly math thinker UH talks

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Speaker 1: about all kinds of stuff money, modern monetary fury, the law,

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Speaker 1: and so forth. He is a doctoral fellow at the

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Speaker 1: Cornell Law School, and he's done a lot of thinking

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Speaker 1: about cash and whether what we lose when society slowly

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Speaker 1: gives up cash is more and more transactions go digital.

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Speaker 1: So Rowan, thank you very much for joining us. Really

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Speaker 1: looking forward to talking to UH. Why should we care

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Speaker 1: about the existence of cash in your view? Uh, Well,

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Speaker 1: thank you for having me, um, And I think the

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Speaker 1: first thing tonight is that the rumors of cash's demise

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Speaker 1: might be slightly exaggerated. UM. First, I don't think it's

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Speaker 1: just a matter of UM even convenience or the elites.

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Speaker 1: As my friend Brett Scott has has written about at length,

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Speaker 1: there's a there's a deliberate war on cash by UM

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Speaker 1: certain industries who benefit from the move to digital cash,

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Speaker 1: notably various financial technology and regular financial industries. UM. There's

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Speaker 1: actually a pushback starting now. Places like Philadelphia have passed

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Speaker 1: laws requiring physical cash UM. And I think if you

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Speaker 1: look at the history of digital voting and the problems

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Speaker 1: there UM, and and the ways that voting experts talk

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Speaker 1: about the value of sort of in person physical voting,

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Speaker 1: there's a good case be made that whatever happens with

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Speaker 1: digital that we're still going to need physical cash as

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Speaker 1: another layer, as a kind of fail safe, and should

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Speaker 1: be taking steps to protect that. UM. But I think

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Speaker 1: when it comes to digital UM finance, and as you say,

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Speaker 1: the world is sort of moving increasingly towards centering digital

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Speaker 1: payments as as the primary way of paying. We're in

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Speaker 1: a moment now where we have to make a decision

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Speaker 1: as a society whether the balance of civil liberties and

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Speaker 1: privacy on one hand and surveillance, control and law enforcement

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Speaker 1: on the other either maintains the sort of uneasy relationship

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Speaker 1: it's had for centuries with respect to money, or whether

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Speaker 1: it moves drastically in one direction away from the ability

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Speaker 1: of average people to engage in any form of monetary

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Speaker 1: activity that isn't surveilled, controlled, and potentially censored on the

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Speaker 1: basis of the interest of political authorities. And I think

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Speaker 1: the really important thing to think about here is that

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Speaker 1: this isn't a question where we should be thinking about

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Speaker 1: it as taking an active step to introduced digital cash,

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Speaker 1: but rather that if we don't do something, the inertia

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Speaker 1: of technology will take away something that we already have.

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Speaker 1: And in that respect, the radical move is to get

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Speaker 1: rid of cash and cash like services, not to allow

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Speaker 1: them in the digital world that we're building. Maybe before

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Speaker 1: we go any further, you could explain the relationship between

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Speaker 1: money and governments as it's existed historically, because I think

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Speaker 1: this is probably going to influence a lot of our discussion.

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Speaker 1: But how do you see that relationship? Yeah? Thanks so, I,

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Speaker 1: as as Joe said, come from a background in modern

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Speaker 1: monetary theory, but I also come from a background in

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Speaker 1: the legal history of money. And scholars like Christine Disanne

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Speaker 1: and Roy Krietner and others have traced that the way

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Speaker 1: that money throughout history has been a tool of public

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Speaker 1: governance and most importantly a creature of law, so you

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Speaker 1: can have private actors involved in the making of law.

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Speaker 1: My my former law professor, Caterine A. Pistol, has a

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Speaker 1: whole book out recently called The Code of Capital about

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Speaker 1: the way that private lawyers used various legal techniques to

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Speaker 1: old capital and make capital instruments, but that ultimately you

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Speaker 1: require some sort of public authority to not only enforced law,

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Speaker 1: but be the kind of enforcer of final settlement. If

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Speaker 1: you have disagreements amongst private arbitrators or private lawyers, the

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Speaker 1: place that they go to resolve those things is the

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Speaker 1: public courts and ultimately some sort of central court that

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Speaker 1: says this is the sort of final decision. So when

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Speaker 1: we look at the way that money works, there is

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Speaker 1: the charter lists sort of m M T argument that

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Speaker 1: whatever kind of money the state says it will accept

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Speaker 1: in payment of its debts will always have a primacy

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Speaker 1: in any society with a functioning rule of law, because

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Speaker 1: that's the entity that most people are going to find

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Speaker 1: themselves in some sort of relationship with, or know that

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Speaker 1: their friends and colleagues and and and sort of trading

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Speaker 1: partners are also going to be in some relationship with.

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Speaker 1: But it's also because that entity can choose what kinds

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Speaker 1: of private contracts and private property it wants to enforce.

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Speaker 1: So there's always been various forms of private money issued

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Speaker 1: in circulating in circulation alongside public money um and and

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Speaker 1: some of them have been more or less validated by

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Speaker 1: the state, notably, for example, to turn towards uh state

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Speaker 1: licensed commercial banks being able to issue money being considered

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Speaker 1: one of the notable developments towards modern capitalism. But even

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Speaker 1: with sort of various forms of private community currency or

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Speaker 1: private credit, there's always a relationship to state validation, state enforcements,

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Speaker 1: state legitimacy. And if you think about the modern economy today,

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Speaker 1: there's so many ways in which public law and legal

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Speaker 1: governance structures even the most private relationships. It's impossible to

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Speaker 1: think of a world in which you could sort of

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Speaker 1: even go out into the middle of the Pacific Ocean

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Speaker 1: and try to create some private utopia without international water

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Speaker 1: law coming into into relevance or things like that. So

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Speaker 1: so in my opinion. Money is always a creature of

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Speaker 1: public governance. It's always an instrument of law, and public

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Speaker 1: law is always the basis for the way that we

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Speaker 1: govern even private actors. Before we go any further, I'm

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Speaker 1: actually curious if we just need to define what cash is,

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Speaker 1: because Okay, I have a dollar bill or a twenty

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Speaker 1: dollar bill in my pocket. That cash. We're gonna be

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Speaker 1: talking about it more. What cash means in the digital realm?

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Speaker 1: What how how do you define cash? Yeah, that's a

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Speaker 1: great question. So I think if you look at the

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Speaker 1: history of money, on one hand, you can look at

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Speaker 1: it in terms of the kind of legal and power

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Speaker 1: dynamics at play, and that's a really important lens. Another

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Speaker 1: lens to look at it is in terms of its materiality.

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Speaker 1: So a lawyer at the Federal is a Bank of

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Speaker 1: New York. Joseph Summer has a line that I like

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Speaker 1: to use or like to borrow, which is UM. Money

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Speaker 1: is what payment systems do. And if you look throughout history,

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Speaker 1: there's been two major forms of money that have existed

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Speaker 1: in in parallel, in sort of combination with each other.

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Speaker 1: UM one is a system of ledgers. So the the

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Speaker 1: economist time at Minski would say, you can think of

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Speaker 1: the whole economy as a series of balance sheets and

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Speaker 1: income statements. You could imagine a sort of great, you know,

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Speaker 1: god like master account in the sky, where everybody's liabilities

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Speaker 1: and assets are being constantly added and weighed up and

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Speaker 1: moved around relative to each other. But the other one

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Speaker 1: is a system of tokens, a system of what we

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Speaker 1: would call legally bearer instruments, where there is no single ledger,

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Speaker 1: even distributed ledger. There's no ledger at all. Um. It's

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Speaker 1: it's simply an instrument, a physical thing, or it can

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Speaker 1: be a digital thing that you that you own, and

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Speaker 1: the act of being able to show that you're in

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Speaker 1: possession of it is proof that it is. It is

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Speaker 1: your asset. And this will goes back, actually interestingly to

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Speaker 1: the origins of writing itself, about six or eight thousand

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Speaker 1: years ago. The archaeologist M. Denise schmant Besser at when

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Speaker 1: she started looking at where writing came from. What she

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Speaker 1: saw was that there were these three D clay tokens,

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Speaker 1: sort of little kind of shapes and abstractions of various

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Speaker 1: kinds of animals that people used to use as a

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Speaker 1: form of tax receipt so not even a tax credit,

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Speaker 1: but proof you paid your taxes um that the tax

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Speaker 1: collector would go around to the provinces and when you

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Speaker 1: give them the right amount of real goods and services,

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Speaker 1: they would give you a little token to prove that

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Speaker 1: you had paid, so that when the time came to

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Speaker 1: sort of do you do your taxes effectively, you could

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Speaker 1: present these tokens. And what happened was that eventually they

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Speaker 1: started to store these tokens in forms of clay tubes

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Speaker 1: for sort of safe keeping, so that the tax collector

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Speaker 1: couldn't steal them or you know, skim off the top.

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Speaker 1: And then over time they would start to mark the

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Speaker 1: outside of these sealed clay tubes with with little markings

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Speaker 1: to show what three D tokens were inside. And eventually

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Speaker 1: they said, you know what, rather than carrying around this

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Speaker 1: tube with these markings, why don't we just roll the

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Speaker 1: whole thing onto a flat piece of clay and put

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Speaker 1: the markings there. And that was the sort of origins

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Speaker 1: of what we now consider writing on a piece of paper.

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Speaker 1: But it began with a three D token that people

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Speaker 1: would physically hold as an abstract representation of tax receipts,

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Speaker 1: which is not only entirely consistent with the chart list

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Speaker 1: MMT narrative, but also shows the relationship between even sort

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Speaker 1: of balance sheet accounting based money and a physical bearer

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Speaker 1: kind of abstract less abstract money. So we've defined our variables,

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Speaker 1: we've talked about what money is and whatsh is. Can

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Speaker 1: you maybe talk to us about the value of cash

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Speaker 1: to governments? Like I sort of get the I get

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Speaker 1: why cash is important for individuals. You know, you can

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Speaker 1: put stuff on your mattress, as we mentioned in the intro,

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Speaker 1: and you can hide certain transactions from the government, possibly,

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Speaker 1: so there are privacy issues at play there. But is

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Speaker 1: there any reason that governments should want cash? Yeah? I

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Speaker 1: mean I think if you sort of maybe hopelessly idealist,

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Speaker 1: you would think that any government's interests should be to

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Speaker 1: preserve people's civilities um as as a sort of core feature.

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Speaker 1: People often like to present um civilities and law enforcement

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Speaker 1: interests as in in conflict with each other, sort of

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Speaker 1: a trade off between being able to catch the bad

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Speaker 1: guys and let the good guys get away with things.

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Speaker 1: But there seems to be, at least to me in

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Speaker 1: my legal capacity, very little point in having law enforcement

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Speaker 1: if it isn't to protect people's legal rights includes our

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Speaker 1: civilities UM, but to sort of think about the government

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Speaker 1: as an as an entity, as an institution with its

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Speaker 1: own set of vested interests UM. I think one area,

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Speaker 1: certainly is that, at least until recently, the idea of

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Speaker 1: the government maintaining its own accounts was not considered the

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Speaker 1: primary kind of feasible model for an account based money UM.

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Speaker 1: Usually there have been various forms of private institutions or

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Speaker 1: delegated institutions who maintain parts of what we could call

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Speaker 1: the kind of common universal ledger, And in that respect,

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Speaker 1: the more power that those entities have over both economic

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Speaker 1: information and payment system settlement, the more the state exists

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Speaker 1: in a kind of UM public private partnership with those

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Speaker 1: actors and has to share power. So having direct cash

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Speaker 1: that goes into individual citizens hands is a way to

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Speaker 1: counterbalance the power of any private intermediaries that they might

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Speaker 1: be UM employing. Beyond that, I think that there are

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Speaker 1: sort of technological or technical benefits to having physical cash UM,

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Speaker 1: in the sense that it creates a different kind of

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Speaker 1: infrastructural need or a different kind of infrastructural cost benefit

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Speaker 1: analysis when you have to do things like inject money

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Speaker 1: into an area that doesn't have established institutions, doesn't have

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Speaker 1: established banks or even post offices that can function as banks,

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Speaker 1: or if you're going into a war zone, or if

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Speaker 1: you need to be able to move money into a

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Speaker 1: place temporarily that's not going to have established accountants and

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Speaker 1: established payments intermediaries, and then want to leave that place

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Speaker 1: shortly thereafter. Um. Having something that is sort of instrument

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Speaker 1: out rather than institution in I think has its own

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Speaker 1: unique benefits depending on the use case, and that that's

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Speaker 1: thing that throughout history, for example, has been very useful

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Speaker 1: for states with potentially moving borders. So if you think

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Speaker 1: about Europe and the sort of maps you see about

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Speaker 1: the evolution of various European political units, and then kind

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Speaker 1: of every five years the whole map is rearranging. Requiring

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Speaker 1: the same entity to be accountable in the exact same

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Speaker 1: way to a public authority might be unfeasible or at

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Speaker 1: least quite difficult, whereas having an instrument that can sort

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Speaker 1: of do the work of validating itself in people's pockets,

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Speaker 1: UH creates a very different kind of set of costs

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Speaker 1: and potential. So something I'm curious about is that you know,

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Speaker 1: a lot of the people who are most interested in

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Speaker 1: this topic, the idea of censorship free payments, the idea

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Speaker 1: of bearer assets that people can hold onto for person

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Speaker 1: aid to transfer to person B without worrying about person

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Speaker 1: see overseeing it. Are people who are involved in the

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Speaker 1: non state cryptocurrency realm bitcoiners and so forth. And then

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Speaker 1: a lot of people who are sort of interested in

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Speaker 1: working within the existing existing system, including many M M.

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Speaker 1: Tears and Keynesians and people who otherwise accept that public

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Speaker 1: money is an important thing, that public institutions are good,

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Speaker 1: tend to be uh more skeptical of their worldview, and

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Speaker 1: so I'm curious you sort of bridge the two, and

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Speaker 1: I'm what, what do you have a hard time in

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Speaker 1: the circles that you deal with on the public money

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Speaker 1: front arguing convincing people that these sort of crypto perspective

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Speaker 1: on money, at least from a privacy and censorship standpoint,

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Speaker 1: is something that they need to internalize more seriously into

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Speaker 1: their worldview. Yeah, that's a great question. I think there's

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Speaker 1: been a lot of I'm not going to say trauma,

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Speaker 1: but a lot of skepticism in precisely because the people

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Speaker 1: that they usually associate these kinds of ideas with are

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Speaker 1: the kinds of people that you could be considered either

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Speaker 1: libertarians on one hand, or money money cranks on the other.

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Speaker 1: And so the minute they even hear the word digital

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Speaker 1: currency of cryptocurrency, they sort of think you're one of

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Speaker 1: those people. But a lot of the people I think

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Speaker 1: who do come from an m MT point of view

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Speaker 1: do so because they care about the empowerment of individuals

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Speaker 1: relative to the state. I mean, for example, a job

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Speaker 1: guarantee is at least in my opinion, a way of

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Speaker 1: reclaiming power for individuals even against the state and saying,

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Speaker 1: you know, I have a right to a job. This

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Speaker 1: isn't something that the state can arbitrarily deny me. So

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Speaker 1: even though you're relying on the public institution to provide

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Speaker 1: the job, you're doing it in a way that's designed

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Speaker 1: to transfer sort of relative power away from the center

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Speaker 1: and towards the proofhery. So once you explain these ideas,

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Speaker 1: I think it's often quite possible to get people on board.

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Speaker 1: It's just that it is new, and that it's hard

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Speaker 1: enough for the average person to to get their head

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Speaker 1: around five thousand years of monetary history and macroeconomic theory

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Speaker 1: and central banking operations. To then add on sort of

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Speaker 1: the entire world of technology is just it's a lot

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Speaker 1: to bite off. As someone coming from a background in

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Speaker 1: law and and now money and finance and now moving

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Speaker 1: into technology, there's a lot of technical competencies to juggle.

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Speaker 1: But I would say that that the m m T

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Speaker 1: community has been very open and warm to at least

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Speaker 1: trying to incorporate these ideas as it involves and grows. Um.

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Speaker 1: For example, it had my friend Brett Scott as a

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Speaker 1: keynote speaker at the International m Ntique Conference two years

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Speaker 1: ago in Kansas City, which I don't think would have

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Speaker 1: happened if if there was a sort of antipathy towards

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Speaker 1: um these concerns. I think one of the challenges is that,

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Speaker 1: you know, not to get too crude, but on the

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Speaker 1: kind of two dimensional political access. A lot of the

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Speaker 1: m m T focuses on economic equality, and so it's

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Speaker 1: that kind of left right spectrum, but that and often

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Speaker 1: to make the case in favor of economic equality involves

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Speaker 1: making a case for the benefit for the benefits that

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Speaker 1: can be gained from collective governance. So you're offering in

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Speaker 1: a position where you're defending the state against people that

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Speaker 1: say the government can't do anything good. So to be

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Speaker 1: able to hold that thought in your head simultaneously as saying, yes,

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Speaker 1: the government is a necessary engine for social justice and equality,

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Speaker 1: but also maybe we shouldn't be trusting it with all

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Speaker 1: of our hopes, dreams, and forgetting historical moments when the

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Speaker 1: state kept a list of everybody everybody knew and everybody

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Speaker 1: where everybody went, and the problems that came from that,

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Speaker 1: whether that was right wing governments or left wing governments. UM.

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Speaker 1: To keep that kind of left libertarian, libertarian, socialists, anarchists

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Speaker 1: kind of framework in your head as well as making

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Speaker 1: a case for collective government, democratic socialism, etcetera. UM, it

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Speaker 1: often feels like just another priority for people, and they

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Speaker 1: often might say, well, that's great, but that's not my

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Speaker 1: my area. UM And I do try to kind of

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Speaker 1: bang this drum. And I think the man Courier, who's

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Speaker 1: who works in a lot of kind of consumer oriented

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Speaker 1: financial regulation issues is banging this drum quite a lot

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Speaker 1: as well. UM. And I think that you're going to

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Speaker 1: see more and more attention to this as a lot

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Speaker 1: of the finance scholars start to focus their attention on

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Speaker 1: digital currency. So just to press on this issue, because

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Speaker 1: this is exactly, um, what I was tweeting about earlier.

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Speaker 1: But if you think about one of the use cases

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Speaker 1: for cryptocurrencies that comes up a lot, it's this idea

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Speaker 1: of censorship free digital money that's sort of outside the

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Speaker 1: grasp of existing governments or power structures. If crypto went

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Speaker 1: mainstream enough, or if crypto adoption were really widespread, would

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Speaker 1: that diminish the monetary sovereignty that allows m m T

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Speaker 1: to exist theoretically or be effective. UM. I don't think

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Speaker 1: so at all, actually, and I understand why that's a concern,

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Speaker 1: But I think that this is one of those examples

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Speaker 1: where a much richer understanding of the kind of way

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Speaker 1: that law drives public money's value. Often when m m

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Speaker 1: T is talk about, for example, taxes driving money, UM,

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Speaker 1: And what you'll see when you read those um sort

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Speaker 1: of scholar pieces, they'll say, taxes includes fees and fines

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Speaker 1: and court judgments and a whole range of what might

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Speaker 1: be technically called non reciprocal hierarchically imposed obligations from the state. UM.

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Speaker 1: But it but it often in people's minds comes across

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Speaker 1: a sort of a quantity number, so that you need

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Speaker 1: to have a quantity of taxes ten taxes to to

434
00:27:21,400 --> 00:27:24,520
Speaker 1: impose a demand of ten dollars on the economy. But

435
00:27:24,560 --> 00:27:26,600
Speaker 1: the way I think about it as a lawyer is

436
00:27:26,680 --> 00:27:33,639
Speaker 1: that the state is simultaneously in creating and enforcing every

437
00:27:33,680 --> 00:27:37,840
Speaker 1: property right and every contract right that the entire private,

438
00:27:37,920 --> 00:27:42,000
Speaker 1: sort of market based economy relies upon to operate. And

439
00:27:42,040 --> 00:27:45,800
Speaker 1: that's before we get to things like limited liability corporations

440
00:27:45,200 --> 00:27:50,919
Speaker 1: and banking charters and things like that, So that in reality,

441
00:27:51,400 --> 00:27:54,639
Speaker 1: it's not just a matter of the sort of tax

442
00:27:54,720 --> 00:27:56,240
Speaker 1: bill you get at the end of the year, where

443
00:27:56,240 --> 00:27:59,320
Speaker 1: you can see a particular number that represents the sort

444
00:27:59,359 --> 00:28:03,879
Speaker 1: of tax striven money value. It's this much more kind

445
00:28:03,880 --> 00:28:08,879
Speaker 1: of risk liability cloud that exists in a state of

446
00:28:08,920 --> 00:28:11,440
Speaker 1: probability at every point in time. If I walk down

447
00:28:11,520 --> 00:28:14,919
Speaker 1: the street, I could potentially knock somebody over accidentally if

448
00:28:14,960 --> 00:28:18,080
Speaker 1: I'm not paying attention. If they break their shoulder, then

449
00:28:18,119 --> 00:28:21,040
Speaker 1: they could sue me, and then under you know, principles

450
00:28:21,040 --> 00:28:23,760
Speaker 1: of tort law, I could be liable to pay them damages.

451
00:28:24,359 --> 00:28:26,159
Speaker 1: I could drive down the street and my car and

452
00:28:26,200 --> 00:28:28,239
Speaker 1: the same thing could happen. You know, somebody could come

453
00:28:28,240 --> 00:28:30,080
Speaker 1: onto my property and I could fail to have a

454
00:28:30,160 --> 00:28:34,440
Speaker 1: sign up. All of these create a formal legal liability risk.

455
00:28:34,920 --> 00:28:37,879
Speaker 1: That it's a sort of fog that we're just living

456
00:28:37,920 --> 00:28:41,560
Speaker 1: in all the time, And because that fog is always

457
00:28:41,800 --> 00:28:45,040
Speaker 1: sort of positively valued, that we don't ever exist in

458
00:28:45,040 --> 00:28:48,080
Speaker 1: a state of zero lehig liability risk. That it doesn't

459
00:28:48,480 --> 00:28:51,320
Speaker 1: it doesn't reduce down to your tax bill to think

460
00:28:51,360 --> 00:28:54,640
Speaker 1: about why you're going to need public money. But even

461
00:28:54,680 --> 00:28:57,160
Speaker 1: more broadly than that, we've had a lot of forms

462
00:28:57,160 --> 00:29:01,640
Speaker 1: of private money throughout history operating in circulation alongside public money,

463
00:29:01,640 --> 00:29:04,920
Speaker 1: and it hasn't ever provided that kind of challenge. And

464
00:29:04,960 --> 00:29:08,000
Speaker 1: if you think about the way that things like tax

465
00:29:08,040 --> 00:29:13,440
Speaker 1: havens or Swiss bank accounts work today, um, it's actually

466
00:29:13,480 --> 00:29:16,480
Speaker 1: the richest and most powerful and largest pots of money

467
00:29:16,840 --> 00:29:20,440
Speaker 1: that require state protection the most. I often like to

468
00:29:20,520 --> 00:29:22,360
Speaker 1: joke that if you really wanted to kind of get

469
00:29:22,440 --> 00:29:24,360
Speaker 1: rid of tax havens, one way to do it could

470
00:29:24,360 --> 00:29:27,160
Speaker 1: be to just say we're not going to enforce any

471
00:29:27,280 --> 00:29:31,760
Speaker 1: legal sanction against anybody that steals assets above a certain

472
00:29:31,800 --> 00:29:34,360
Speaker 1: amount of money that haven't been declared. So if you

473
00:29:34,400 --> 00:29:36,680
Speaker 1: want to go with your kind of hacking skills and

474
00:29:36,720 --> 00:29:40,120
Speaker 1: go after the Cayman Islands bank accounts. Go for it.

475
00:29:40,120 --> 00:29:43,080
Speaker 1: It's it's open day. We will not stop enforcement. We

476
00:29:43,120 --> 00:29:46,040
Speaker 1: will not try to prosecute you for theft or anything else.

477
00:29:46,520 --> 00:29:48,440
Speaker 1: And I think if you started to see that kind

478
00:29:48,440 --> 00:29:53,600
Speaker 1: of use of legal power, suddenly a lot of entities

479
00:29:53,600 --> 00:29:56,200
Speaker 1: that like to think of their wealth as private are

480
00:29:56,240 --> 00:29:59,600
Speaker 1: going to realize just how dependent upon the public legal

481
00:29:59,640 --> 00:30:04,760
Speaker 1: system they are to protect and support that. Well, I

482
00:30:04,800 --> 00:30:08,360
Speaker 1: love that. I love that framework. Let's talk a little

483
00:30:08,400 --> 00:30:14,840
Speaker 1: bit about what you're envisioning in terms of state digital cash.

484
00:30:15,000 --> 00:30:18,200
Speaker 1: So right now, if I want to, like, if I

485
00:30:18,320 --> 00:30:20,400
Speaker 1: visit Tracy in Hong Kong and we go out to

486
00:30:20,440 --> 00:30:23,000
Speaker 1: dinner together, maybe I split the check and I, like,

487
00:30:23,080 --> 00:30:26,840
Speaker 1: you know, use whatever app uh it's on both of

488
00:30:26,840 --> 00:30:31,200
Speaker 1: our phones and pay her. That's not cash because that

489
00:30:31,400 --> 00:30:33,920
Speaker 1: the money that I have in say my Venmo account

490
00:30:33,960 --> 00:30:36,360
Speaker 1: is really just a liability of Venmo, and if I

491
00:30:36,400 --> 00:30:40,280
Speaker 1: transfer it to Tracy, then that's a lot her liability

492
00:30:40,280 --> 00:30:44,160
Speaker 1: of Venmo. It's not a bearer asset. How what would

493
00:30:44,160 --> 00:30:47,960
Speaker 1: it look like for me to have a true digital

494
00:30:48,200 --> 00:30:51,920
Speaker 1: dollar something that is pegged one to one against the dollar,

495
00:30:52,320 --> 00:30:54,640
Speaker 1: but that is not a liability of some bank or

496
00:30:54,680 --> 00:30:59,120
Speaker 1: some fintech company, but something that I actually control and

497
00:30:59,240 --> 00:31:02,920
Speaker 1: can move around and at my will. Yeah, So if

498
00:31:02,960 --> 00:31:06,360
Speaker 1: you think about I would sort of divide up digital

499
00:31:06,520 --> 00:31:10,320
Speaker 1: currency infrastructure into sort of three pillars. You've got accounts,

500
00:31:11,000 --> 00:31:14,320
Speaker 1: You've got credit, and then you've got cash. And with

501
00:31:14,400 --> 00:31:19,280
Speaker 1: respect to cash, the critical part to me is that

502
00:31:19,600 --> 00:31:25,280
Speaker 1: the two different wallets, whatever sort of hardware and software

503
00:31:25,320 --> 00:31:30,840
Speaker 1: combination that is holding these instruments, can effectuate a transaction

504
00:31:30,920 --> 00:31:34,840
Speaker 1: with each other according to a set of predetermined rules.

505
00:31:35,080 --> 00:31:37,000
Speaker 1: So we can call that a protocol, in the same

506
00:31:37,000 --> 00:31:38,800
Speaker 1: way as you create the t c P i P

507
00:31:38,800 --> 00:31:43,640
Speaker 1: protocol for the Internet, or the asset and t P protocols,

508
00:31:43,640 --> 00:31:45,680
Speaker 1: so that emails know how to talk to each other.

509
00:31:46,400 --> 00:31:48,680
Speaker 1: So you create some sort of wallet system that can

510
00:31:48,760 --> 00:31:52,640
Speaker 1: identify each other with a handshake, so regular public encryption,

511
00:31:52,720 --> 00:31:56,080
Speaker 1: things like that. And then the way that the wallet

512
00:31:56,120 --> 00:31:58,000
Speaker 1: balances work. And this is the sort of way that

513
00:31:58,040 --> 00:32:01,080
Speaker 1: I think about that is different from innsferring money from

514
00:32:01,080 --> 00:32:04,560
Speaker 1: one account to another is imagine it in terms of

515
00:32:04,640 --> 00:32:08,360
Speaker 1: getting change for physical cash. So if I go to

516
00:32:08,400 --> 00:32:11,440
Speaker 1: a bank and I'm wearing a battle club and I

517
00:32:11,480 --> 00:32:14,640
Speaker 1: don't get knocked over and arrested by the security card

518
00:32:14,640 --> 00:32:16,320
Speaker 1: for wearing a battle club in the bank. But imagine

519
00:32:16,360 --> 00:32:18,400
Speaker 1: I walking into the bank with a battle club and

520
00:32:18,400 --> 00:32:20,960
Speaker 1: I have a hundred dollar bill, and I asked the

521
00:32:20,960 --> 00:32:24,640
Speaker 1: bank teller to give me five twenties. Um, I don't

522
00:32:24,640 --> 00:32:27,280
Speaker 1: need an account at that bank to do that, right now.

523
00:32:27,320 --> 00:32:29,200
Speaker 1: Maybe there are laws that say I need to sort

524
00:32:29,200 --> 00:32:31,240
Speaker 1: of show my idea after a certain amount of money.

525
00:32:31,240 --> 00:32:34,240
Speaker 1: But at this point, at least technically, the bank is

526
00:32:34,320 --> 00:32:39,120
Speaker 1: only engaging in money um exchange. Giving five twenties for

527
00:32:39,480 --> 00:32:42,280
Speaker 1: one hundred is just changing the physical structure of the money.

528
00:32:42,280 --> 00:32:45,920
Speaker 1: It isn't moving the money around. Now, imagine you and

529
00:32:46,000 --> 00:32:48,240
Speaker 1: I together walk into the bank, both of us wearing

530
00:32:48,280 --> 00:32:53,000
Speaker 1: a batat Claver, and I have fifty dollars and you

531
00:32:53,080 --> 00:32:54,720
Speaker 1: have fifty dollars. I'm not going to do that, by

532
00:32:54,720 --> 00:32:57,200
Speaker 1: the way. Yeah, you know, I wouldn't recommend it, you know,

533
00:32:57,640 --> 00:33:00,000
Speaker 1: And I don't give legal advice, you know, very often publicly.

534
00:33:00,080 --> 00:33:03,600
Speaker 1: But my legal advice we're not to go into Okay,

535
00:33:03,680 --> 00:33:05,760
Speaker 1: keep going, keep going, But but but say, but say

536
00:33:05,880 --> 00:33:08,080
Speaker 1: this was Amnesty Day and you did go in and

537
00:33:08,480 --> 00:33:10,120
Speaker 1: you had a fifty dollar bill, and I had a

538
00:33:10,120 --> 00:33:13,600
Speaker 1: fifture dollar bill, and we walked up together, and you know,

539
00:33:13,920 --> 00:33:15,920
Speaker 1: we put a piece of paper down so they didn't

540
00:33:15,920 --> 00:33:17,720
Speaker 1: even know our voice, and a piece of paper said,

541
00:33:17,760 --> 00:33:22,240
Speaker 1: please turn these into five twenties. So instead of a

542
00:33:22,280 --> 00:33:24,479
Speaker 1: hundred dollar bill, there's two of us with two different

543
00:33:24,640 --> 00:33:27,520
Speaker 1: sized bills or the same size bills, And we go

544
00:33:27,560 --> 00:33:30,400
Speaker 1: in and we asked for them to be exchanged. Now

545
00:33:30,720 --> 00:33:33,040
Speaker 1: they give us back those five twenties, but instead of

546
00:33:33,160 --> 00:33:35,560
Speaker 1: we can't split them equally, so I take two and

547
00:33:35,640 --> 00:33:38,520
Speaker 1: you take three. So you walk out with sixty dollars

548
00:33:38,520 --> 00:33:41,280
Speaker 1: and I walk out with forty dollars. The effect of

549
00:33:41,400 --> 00:33:44,880
Speaker 1: that for you and I is that we have transacted

550
00:33:44,920 --> 00:33:48,400
Speaker 1: ten dollars, right, But the effect from the bank teller's

551
00:33:48,400 --> 00:33:51,120
Speaker 1: point of view is the bank teller has exchanged one

552
00:33:51,520 --> 00:33:54,040
Speaker 1: dollars for one hundred dollars. He doesn't know who we are,

553
00:33:54,360 --> 00:33:57,440
Speaker 1: doesn't know what that transaction was for. Theoretically, you could

554
00:33:57,440 --> 00:33:59,640
Speaker 1: wait outside and immediate with the battle club. So I

555
00:33:59,680 --> 00:34:02,040
Speaker 1: walk here and I get the hundred dollars, and then

556
00:34:02,080 --> 00:34:05,000
Speaker 1: I walk outside and I dropped forty on the floor,

557
00:34:05,040 --> 00:34:06,480
Speaker 1: sixty on the floor, and you pick it up and

558
00:34:06,720 --> 00:34:09,600
Speaker 1: walk away. But the point is that from the point

559
00:34:09,600 --> 00:34:12,759
Speaker 1: of view of the authority of the central entity there,

560
00:34:13,600 --> 00:34:18,560
Speaker 1: the only thing it's doing is a validating the no

561
00:34:18,760 --> 00:34:21,360
Speaker 1: double spending rule. So a hundred dollars walked in, a

562
00:34:21,400 --> 00:34:25,960
Speaker 1: hundred dollars walked out, and b it's changing the relative

563
00:34:26,120 --> 00:34:31,680
Speaker 1: size of different wallet balances. And that, to me is

564
00:34:31,760 --> 00:34:35,280
Speaker 1: the way that you can conceive technically of a system

565
00:34:35,360 --> 00:34:38,920
Speaker 1: where the protocol between us, the set of rules between us,

566
00:34:39,560 --> 00:34:45,480
Speaker 1: can ensure that there is a protection against counterfeiting and

567
00:34:45,719 --> 00:34:47,960
Speaker 1: that the two actors know each other, but that they

568
00:34:47,960 --> 00:34:50,960
Speaker 1: don't know any more information that they need to and

569
00:34:52,560 --> 00:34:56,000
Speaker 1: an actual transaction being taken place that needs to take place.

570
00:34:56,400 --> 00:34:58,359
Speaker 1: So if you think of the bank teller there as

571
00:34:58,480 --> 00:35:01,080
Speaker 1: rather than a human being, but just a robot, and

572
00:35:01,120 --> 00:35:03,600
Speaker 1: that robot is not even a third party, but rather

573
00:35:03,880 --> 00:35:07,120
Speaker 1: a set of protocols that the two wallets need to

574
00:35:07,680 --> 00:35:12,399
Speaker 1: agree exactly on before the transaction will take place, then

575
00:35:12,480 --> 00:35:15,520
Speaker 1: you've got a system where the only thing the government

576
00:35:15,560 --> 00:35:18,759
Speaker 1: really needs to be able to monitor is that no

577
00:35:19,080 --> 00:35:22,440
Speaker 1: new instruments are being created relative to the number that

578
00:35:22,480 --> 00:35:28,640
Speaker 1: are already in existence, and that's very different to approving transactions.

579
00:35:28,680 --> 00:35:31,279
Speaker 1: So the notion is that you could create this protocol

580
00:35:31,520 --> 00:35:37,200
Speaker 1: that would basically get over the surveillance or the privacy concerns. Yeah,

581
00:35:37,239 --> 00:35:40,359
Speaker 1: what what you would do is you would have some

582
00:35:40,440 --> 00:35:43,560
Speaker 1: sort of approved hardware and it doesn't have to be

583
00:35:43,680 --> 00:35:47,320
Speaker 1: centrally issued. It could be a white label kind of generic,

584
00:35:47,719 --> 00:35:52,240
Speaker 1: but but based on certain conditions that every um, every

585
00:35:52,440 --> 00:35:55,440
Speaker 1: wallet had to meet a combination of hardware and software.

586
00:35:55,440 --> 00:35:57,880
Speaker 1: So if you think about email right now, you and

587
00:35:57,880 --> 00:36:00,640
Speaker 1: I can send information over the Internet, and depending on

588
00:36:00,680 --> 00:36:03,839
Speaker 1: how we structure that information, it can be read by

589
00:36:05,080 --> 00:36:07,200
Speaker 1: a web browser or it could be read by an

590
00:36:07,200 --> 00:36:10,520
Speaker 1: email server. But if you send it in the wrong format,

591
00:36:10,800 --> 00:36:14,359
Speaker 1: the SMTP servers can't communicate with each other because one

592
00:36:14,480 --> 00:36:18,640
Speaker 1: SMTP server, one email server will not recognize the information

593
00:36:18,680 --> 00:36:22,640
Speaker 1: you're sending as information to receive for an email server.

594
00:36:23,200 --> 00:36:25,120
Speaker 1: Sort of like little kids with little blocks that are

595
00:36:25,120 --> 00:36:27,680
Speaker 1: shaped like stars and circles and squares. If you try

596
00:36:27,680 --> 00:36:29,279
Speaker 1: to put the square through the star block, it just

597
00:36:29,320 --> 00:36:32,960
Speaker 1: won't go through. So you can design the protocol in

598
00:36:33,000 --> 00:36:35,880
Speaker 1: relation to the wallets in such a way as to

599
00:36:35,920 --> 00:36:38,600
Speaker 1: say the only kinds of transaction that will go through

600
00:36:39,320 --> 00:36:42,120
Speaker 1: is a transaction that meets these criteria, and one of

601
00:36:42,160 --> 00:36:44,840
Speaker 1: these criteria can be we have to be able to

602
00:36:44,880 --> 00:36:48,320
Speaker 1: do a handshake with each other using public keys. Another

603
00:36:48,360 --> 00:36:51,600
Speaker 1: will be it has to show that A plus B

604
00:36:52,200 --> 00:36:55,239
Speaker 1: on the wallets on one side equals C plus D

605
00:36:55,800 --> 00:36:58,200
Speaker 1: on the wallets on the other side. And and the

606
00:36:58,200 --> 00:37:00,480
Speaker 1: protocol doesn't even need to know how how much those

607
00:37:00,520 --> 00:37:02,919
Speaker 1: balances are, just needs to be able to weigh them

608
00:37:03,040 --> 00:37:06,799
Speaker 1: in a kind of encrypted sense. And then it needs

609
00:37:06,840 --> 00:37:10,120
Speaker 1: to be able to say that once the transactions done,

610
00:37:10,160 --> 00:37:13,680
Speaker 1: it's final and there's no record of it except on

611
00:37:13,840 --> 00:37:17,600
Speaker 1: the wallets themselves. And you can design design something like

612
00:37:17,680 --> 00:37:21,200
Speaker 1: this where the wallet balance is actually kept at home.

613
00:37:21,640 --> 00:37:24,160
Speaker 1: So I'm a I'm a what's called a network manager.

614
00:37:24,200 --> 00:37:27,000
Speaker 1: It's sort of like an evangelist for a nonprofit foundation

615
00:37:27,040 --> 00:37:31,160
Speaker 1: called the Freedom Box Foundation that was designed founded by

616
00:37:31,360 --> 00:37:34,240
Speaker 1: one of my old law professors at Columbia, Evan Mowglan,

617
00:37:34,360 --> 00:37:36,120
Speaker 1: who who was one of the people that really got

618
00:37:36,120 --> 00:37:39,000
Speaker 1: me into this privacy issue. He lost a lot of

619
00:37:39,000 --> 00:37:41,200
Speaker 1: members of his family in the Holocaust, and he said

620
00:37:41,200 --> 00:37:42,719
Speaker 1: to me in a law school class in first year

621
00:37:42,719 --> 00:37:46,040
Speaker 1: of law school, next time they come for my family,

622
00:37:46,080 --> 00:37:48,959
Speaker 1: and they will they'll get every single one because they'll

623
00:37:48,960 --> 00:37:51,160
Speaker 1: know exactly where we are, and they'll know exactly who

624
00:37:51,200 --> 00:37:53,399
Speaker 1: we're talking to. And that hit me like a ton

625
00:37:53,440 --> 00:37:55,160
Speaker 1: of bricks and scared the hell out of me, to

626
00:37:55,160 --> 00:37:56,960
Speaker 1: be honest, which is why I've spent a lot of

627
00:37:57,040 --> 00:37:59,439
Speaker 1: time trying to think about these privacy issues on top

628
00:37:59,480 --> 00:38:03,960
Speaker 1: of the issues of economic justice that I already cared about. UM.

629
00:38:04,000 --> 00:38:06,680
Speaker 1: But he built this Freedom Box Foundation as a way

630
00:38:06,719 --> 00:38:10,200
Speaker 1: to develop a bunch of free software, free and open

631
00:38:10,200 --> 00:38:13,839
Speaker 1: source software that's privacy respecting that you can put on

632
00:38:13,960 --> 00:38:16,880
Speaker 1: tiny little computers, little chips that are about the size

633
00:38:16,920 --> 00:38:20,479
Speaker 1: of a phone charger and that you plug in at home,

634
00:38:20,800 --> 00:38:23,400
Speaker 1: and they use barely any power year, like three or

635
00:38:23,440 --> 00:38:27,080
Speaker 1: four dollars of power year, and they provide all of

636
00:38:27,120 --> 00:38:30,840
Speaker 1: the kinds of quote unquote cloud services that people rely

637
00:38:30,920 --> 00:38:35,720
Speaker 1: on the big centralized financial technology companies for so web server,

638
00:38:36,000 --> 00:38:40,239
Speaker 1: file server, social media, all those kinds of things. UM

639
00:38:40,640 --> 00:38:42,960
Speaker 1: and I run one at home now. I use it

640
00:38:43,040 --> 00:38:45,520
Speaker 1: for for the equivalent of drop Box. I use it

641
00:38:45,560 --> 00:38:48,160
Speaker 1: for the equivalent of Slack with my nonprofit where it's

642
00:38:48,200 --> 00:38:52,319
Speaker 1: called Riot and it works exactly like slack. UM. I

643
00:38:52,440 --> 00:38:54,520
Speaker 1: use it for a VPN to get into my home,

644
00:38:54,920 --> 00:38:58,359
Speaker 1: you know, internet when I'm out surfing the world. There's

645
00:38:58,400 --> 00:39:02,520
Speaker 1: a whole range of hern key, extremely easy to use

646
00:39:02,640 --> 00:39:05,759
Speaker 1: pieces of software that it's incorporated. But you can keep

647
00:39:05,800 --> 00:39:09,000
Speaker 1: this box at home, which means police can't access that

648
00:39:09,040 --> 00:39:12,440
Speaker 1: without a search warrant. Um, it's got Fourth Amendment protection

649
00:39:12,560 --> 00:39:16,120
Speaker 1: to the extent of Fourth Amendment protections still mean anything.

650
00:39:16,800 --> 00:39:20,400
Speaker 1: And you can tunnel into that with a secure tunnel

651
00:39:21,080 --> 00:39:24,200
Speaker 1: from your phone or from anything else. So it wouldn't

652
00:39:24,200 --> 00:39:26,760
Speaker 1: be simply a matter of having digital cash on your phone,

653
00:39:26,840 --> 00:39:29,600
Speaker 1: and then if your phone gets stolen, you've lost your

654
00:39:29,880 --> 00:39:33,400
Speaker 1: your money. You'd be keeping your money literally under the mattress.

655
00:39:33,880 --> 00:39:36,520
Speaker 1: Literally um in in the most sort of you know,

656
00:39:36,920 --> 00:39:39,799
Speaker 1: my grandmother doesn't trust the government kind of way. But

657
00:39:39,960 --> 00:39:41,839
Speaker 1: that the under the mattress would just be a tiny

658
00:39:41,840 --> 00:39:44,839
Speaker 1: little phone charger that's plugged into the wall, and your

659
00:39:44,840 --> 00:39:47,880
Speaker 1: phone would be tunneling into it like a client tunnels

660
00:39:47,920 --> 00:39:52,400
Speaker 1: into an email server today. Um And and that gives

661
00:39:52,400 --> 00:39:55,520
Speaker 1: you some degree of freedom and control. And to be clear,

662
00:39:55,600 --> 00:39:58,440
Speaker 1: I don't think that this would replace all kinds of

663
00:39:58,480 --> 00:40:02,640
Speaker 1: accounts um in the same way. Most people, perhaps outside

664
00:40:02,680 --> 00:40:06,280
Speaker 1: of certain demographics, aren't walking around with ten thousand dollars

665
00:40:06,320 --> 00:40:08,600
Speaker 1: of cash as their entire life savings in the in

666
00:40:08,600 --> 00:40:11,120
Speaker 1: a what in their pocket. But it means that at

667
00:40:11,200 --> 00:40:15,440
Speaker 1: least we have kept that layout of the payment system

668
00:40:15,440 --> 00:40:20,000
Speaker 1: from disappearing forever, and from that possibility of civil liberties

669
00:40:20,040 --> 00:40:24,319
Speaker 1: and privacy from disappearing forever from our vocabulary and our

670
00:40:24,360 --> 00:40:29,120
Speaker 1: political identity. So how much of the money network that

671
00:40:29,160 --> 00:40:33,160
Speaker 1: you just described, the notion of a common protocol, how

672
00:40:33,239 --> 00:40:37,200
Speaker 1: much of that depends on building consensus for it to

673
00:40:37,640 --> 00:40:42,600
Speaker 1: actually work well and work specifically across borders Because we're talking,

674
00:40:42,640 --> 00:40:46,600
Speaker 1: of course about monetary transactions, which tends to be one

675
00:40:46,680 --> 00:40:51,440
Speaker 1: of the most regulated, most sensitive of topics um in

676
00:40:51,760 --> 00:40:55,400
Speaker 1: the world, especially international money transfers. So how do you

677
00:40:55,440 --> 00:40:58,839
Speaker 1: build consensus towards that and would it still work if

678
00:40:58,880 --> 00:41:03,960
Speaker 1: people had differ ideas of how the protocol should actually be. Yeah,

679
00:41:04,080 --> 00:41:07,120
Speaker 1: I mean, I think the first thing is that this

680
00:41:07,320 --> 00:41:13,640
Speaker 1: would likely not become the primary vehicle for large institutional

681
00:41:13,719 --> 00:41:17,560
Speaker 1: money flows, and I think that's the right answer. So

682
00:41:17,600 --> 00:41:19,480
Speaker 1: in the same way as I said before, you know,

683
00:41:19,520 --> 00:41:25,080
Speaker 1: there's a difference between sort of caring about individual private

684
00:41:25,120 --> 00:41:29,160
Speaker 1: transactions and caring whether super rich people get to store

685
00:41:29,160 --> 00:41:31,960
Speaker 1: all their money in Swiss bank accounts. UM. There's a

686
00:41:32,000 --> 00:41:35,080
Speaker 1: difference between what I considered to be the economic privacy

687
00:41:35,080 --> 00:41:39,280
Speaker 1: of individuals and the civilivities of individuals and the rights

688
00:41:39,320 --> 00:41:43,120
Speaker 1: of large corporations to have bank accounts l or huge

689
00:41:43,120 --> 00:41:45,880
Speaker 1: stashes of money that they essentially don't have to declare

690
00:41:47,000 --> 00:41:49,719
Speaker 1: or that art serveiled. And to the extent that those

691
00:41:49,840 --> 00:41:54,000
Speaker 1: kinds of entities are already kind of public entities in

692
00:41:54,000 --> 00:41:56,719
Speaker 1: the sense that corporations have to submit filings and other

693
00:41:56,760 --> 00:42:01,000
Speaker 1: things as a condition of having a limited liability cha UM,

694
00:42:01,040 --> 00:42:04,120
Speaker 1: I think it's entirely reasonable for those kinds of flows

695
00:42:04,160 --> 00:42:07,319
Speaker 1: to be more visible and and to be regulated under

696
00:42:07,719 --> 00:42:13,719
Speaker 1: sort of traditional traditional privacy laws alongside the kinds of

697
00:42:13,800 --> 00:42:18,920
Speaker 1: laws that might protect cash for individuals. UM. In that respect,

698
00:42:19,200 --> 00:42:21,480
Speaker 1: I think you know what you're mostly going to see

699
00:42:21,560 --> 00:42:24,920
Speaker 1: is the same kinds of back of how central accounting

700
00:42:25,800 --> 00:42:29,160
Speaker 1: to manage those laves transactions as we have today, but

701
00:42:29,360 --> 00:42:32,839
Speaker 1: that the push for cash can become the tip of

702
00:42:32,840 --> 00:42:37,040
Speaker 1: the spear for a larger rethinking of privacy issues with

703
00:42:37,160 --> 00:42:40,759
Speaker 1: related to payments that is starting to happen already as

704
00:42:40,800 --> 00:42:43,960
Speaker 1: a result of the broader privacy kind of debate sparked

705
00:42:43,960 --> 00:42:47,600
Speaker 1: by people like Edward Snowden, um And and the kind

706
00:42:47,600 --> 00:42:50,000
Speaker 1: of censorship debate that you're seeing around things like the

707
00:42:50,719 --> 00:42:53,840
Speaker 1: payment sanctions on Iran. When it's very clear that the

708
00:42:53,960 --> 00:42:59,080
Speaker 1: NSA doesn't care about any kind of crypto or other

709
00:42:59,239 --> 00:43:03,200
Speaker 1: form of privacy of financial transactions, even after claiming they

710
00:43:03,200 --> 00:43:07,520
Speaker 1: would never break the cryptography of of the monetary system. Um.

711
00:43:07,560 --> 00:43:10,640
Speaker 1: And when it's clear that the pay whoever controls the

712
00:43:10,640 --> 00:43:14,800
Speaker 1: payment system, can control access to two basic goods in countries,

713
00:43:14,880 --> 00:43:16,799
Speaker 1: that you need to start having a very different kind

714
00:43:16,800 --> 00:43:20,160
Speaker 1: of conversation about how that works internationally. UM. But my

715
00:43:20,160 --> 00:43:23,319
Speaker 1: blind my kind of thinking about this is that there

716
00:43:23,440 --> 00:43:27,520
Speaker 1: is probably a reasonable balance to be had in terms

717
00:43:27,520 --> 00:43:30,920
Speaker 1: of scale and scope of these digital wallets. UM. I

718
00:43:30,920 --> 00:43:33,319
Speaker 1: wouldn't argue for that on day one, because I don't

719
00:43:33,360 --> 00:43:35,839
Speaker 1: think you argue for what you want by sort of

720
00:43:36,040 --> 00:43:40,520
Speaker 1: capitulating to the center of the negotiation on day one. UM.

721
00:43:40,600 --> 00:43:43,600
Speaker 1: But that right now we do have limits on the

722
00:43:43,640 --> 00:43:46,520
Speaker 1: size of physical bills. We don't have a billion dollar

723
00:43:47,000 --> 00:43:50,799
Speaker 1: paper bill um. And I think that's probably okay. And

724
00:43:50,840 --> 00:43:53,200
Speaker 1: to the extent that there was some sort of quantitative

725
00:43:53,280 --> 00:43:56,279
Speaker 1: limit on these kinds of wards, you know, probably maybe

726
00:43:56,280 --> 00:43:58,879
Speaker 1: a thousand dollars two thousand dollars, you could imagine maybe less,

727
00:43:58,880 --> 00:44:02,800
Speaker 1: maybe two and fifty UM. The Central Bank of Sweden,

728
00:44:03,200 --> 00:44:07,000
Speaker 1: which is probably the central bank who's considered digital currency

729
00:44:07,160 --> 00:44:11,520
Speaker 1: in the context of anonymous cash that can work basically offline,

730
00:44:11,680 --> 00:44:16,359
Speaker 1: off bridge between two wallets UM at the most, has

731
00:44:16,400 --> 00:44:19,560
Speaker 1: been talking about having the cash layer that eat cash

732
00:44:19,640 --> 00:44:22,560
Speaker 1: layer as something limited to sort of two d two hundred,

733
00:44:22,920 --> 00:44:27,120
Speaker 1: three hundred dollars worth of corona um, although we'll see

734
00:44:27,160 --> 00:44:30,800
Speaker 1: how truly anonymous and decentralized that model will be depending

735
00:44:30,840 --> 00:44:35,520
Speaker 1: on the technology they choose to adopt or implement. But

736
00:44:35,920 --> 00:44:38,400
Speaker 1: I think you could imagine something where you know, what

737
00:44:38,440 --> 00:44:42,319
Speaker 1: you're essentially talking about is closer to the act of

738
00:44:42,320 --> 00:44:44,400
Speaker 1: taking a couple of hundred dollars in your pocket on

739
00:44:44,400 --> 00:44:48,520
Speaker 1: the plane than it is of really altering the core

740
00:44:48,600 --> 00:44:52,960
Speaker 1: dynamics of international payments flows. We hear things all the

741
00:44:53,040 --> 00:44:57,080
Speaker 1: time about central banks and government talking about their own

742
00:44:57,080 --> 00:44:59,320
Speaker 1: digital currencies, and it's very hard for me to wrap

743
00:44:59,360 --> 00:45:02,440
Speaker 1: around or wrap my head around what they're going for. So,

744
00:45:02,560 --> 00:45:06,080
Speaker 1: for example, you hear about the PBOC doing a digital

745
00:45:06,120 --> 00:45:10,239
Speaker 1: renman b, and my gut feeling is that this is

746
00:45:10,280 --> 00:45:14,480
Speaker 1: not about some incredible urge for consumer privacy. I suspect

747
00:45:14,480 --> 00:45:18,560
Speaker 1: that they have something else in mind. Other people might

748
00:45:18,640 --> 00:45:22,800
Speaker 1: talk about it. I suspect cynically, but maybe less cynically,

749
00:45:22,880 --> 00:45:25,960
Speaker 1: like they just want to sound interesting on a panel

750
00:45:26,040 --> 00:45:29,320
Speaker 1: somewhere by sounding cool and getting to use the word

751
00:45:30,000 --> 00:45:33,160
Speaker 1: blockchain and their official line of business because that's probably

752
00:45:33,160 --> 00:45:35,759
Speaker 1: gonna make them sound interesting or something like that. How

753
00:45:35,840 --> 00:45:39,560
Speaker 1: many how much of the conversation that you hear regarding

754
00:45:39,920 --> 00:45:44,320
Speaker 1: central bank digital currencies really is the result of people

755
00:45:44,440 --> 00:45:47,680
Speaker 1: thinking along the lines of what you're thinking, which is

756
00:45:47,719 --> 00:45:50,120
Speaker 1: that if we don't have some sort of central bank

757
00:45:50,160 --> 00:45:53,040
Speaker 1: digital currency, if we don't have a true digital cash,

758
00:45:53,440 --> 00:45:57,840
Speaker 1: then something that people value could truly disappear before they

759
00:45:57,880 --> 00:46:01,040
Speaker 1: ever had to say so in its disappearance. Yeah, so,

760
00:46:01,120 --> 00:46:03,600
Speaker 1: I mean, I will give a shout out to In

761
00:46:03,640 --> 00:46:06,120
Speaker 1: addition to Brat, Scott had mentioned a few times to

762
00:46:06,280 --> 00:46:08,480
Speaker 1: the group of Positive Money in the UK, who you know,

763
00:46:08,520 --> 00:46:10,840
Speaker 1: I've had some disagreements about their theories of money before,

764
00:46:10,880 --> 00:46:13,600
Speaker 1: but they've been writting some really important policy papers around

765
00:46:13,680 --> 00:46:16,200
Speaker 1: the case for cash and you know, having digital cash,

766
00:46:16,239 --> 00:46:18,279
Speaker 1: and I think that they're one of the few, you know,

767
00:46:18,440 --> 00:46:20,480
Speaker 1: interest groups that have a large dream of influence at

768
00:46:20,480 --> 00:46:23,840
Speaker 1: a national level. Um, that are really taking the cash

769
00:46:23,960 --> 00:46:28,359
Speaker 1: dimension of this quite seriously. UM, I really would love

770
00:46:28,400 --> 00:46:31,920
Speaker 1: to see a lot more involvement from privacy people. And

771
00:46:31,960 --> 00:46:34,160
Speaker 1: I would, really, you know, although I'm not holding my breath,

772
00:46:34,239 --> 00:46:37,640
Speaker 1: love to see a lot of the crypto libertarian crowd

773
00:46:37,800 --> 00:46:40,680
Speaker 1: to focus their attention on public money rather than these

774
00:46:40,680 --> 00:46:43,440
Speaker 1: sort of inferior private money is because I think a

775
00:46:43,480 --> 00:46:46,600
Speaker 1: lot of them are motivated by by good concerns when

776
00:46:46,600 --> 00:46:50,560
Speaker 1: it comes to civil libertarian issues, but they are sort

777
00:46:50,560 --> 00:46:54,120
Speaker 1: of hamstrung and sent to the wrong direction by their

778
00:46:54,239 --> 00:46:58,440
Speaker 1: their sort of libertarian theories of money. Unfortunately. UM. But

779
00:46:58,160 --> 00:47:01,279
Speaker 1: I don't think that the majority of people who are

780
00:47:01,360 --> 00:47:05,040
Speaker 1: involved in this discourse are really coming from a privacy

781
00:47:05,080 --> 00:47:08,360
Speaker 1: centric perspective. No, And I think that that's a self

782
00:47:09,040 --> 00:47:14,440
Speaker 1: reinforcing phenomenon because most central bankers are not civil libertarians

783
00:47:14,560 --> 00:47:19,200
Speaker 1: or lawyers there. They're people who did, you know, macroeconomic modeling,

784
00:47:19,440 --> 00:47:22,840
Speaker 1: statistical modeling, and graduate school and wrote a bunch of

785
00:47:22,840 --> 00:47:26,600
Speaker 1: math papers and then got into this world because they're

786
00:47:26,640 --> 00:47:29,200
Speaker 1: interested in thinking about how you can, you know, move

787
00:47:29,400 --> 00:47:32,000
Speaker 1: one or two big levers and move the entire economy.

788
00:47:32,080 --> 00:47:35,000
Speaker 1: I mean, I understand that motivation. I think there's a

789
00:47:35,000 --> 00:47:37,040
Speaker 1: lot to be said for that kind of work, but

790
00:47:37,080 --> 00:47:42,040
Speaker 1: it's a kind of inherently centralizing kind of public planning mentality.

791
00:47:42,160 --> 00:47:44,960
Speaker 1: My my, my advisor Robert Goot likes to say that

792
00:47:45,239 --> 00:47:48,760
Speaker 1: central banking, central banking is the last refuge of central planets.

793
00:47:49,360 --> 00:47:52,240
Speaker 1: Um And and you don't often see that much overlap

794
00:47:52,280 --> 00:47:57,160
Speaker 1: between central planners and civil libertarians unfortunately. UM But I

795
00:47:57,200 --> 00:48:02,040
Speaker 1: think the debate over sent to a bank um technical

796
00:48:02,120 --> 00:48:03,960
Speaker 1: design of this. And you can see this all the

797
00:48:03,960 --> 00:48:07,040
Speaker 1: way from the Bank of International Settlements famous money Flower

798
00:48:07,560 --> 00:48:10,319
Speaker 1: to the many hundreds of almost identical papers that you

799
00:48:10,360 --> 00:48:14,000
Speaker 1: can read from different central banks on the future digital currency.

800
00:48:14,400 --> 00:48:17,400
Speaker 1: They usually frame it in this sort of dichonomy between

801
00:48:17,440 --> 00:48:21,120
Speaker 1: token based in account based money, which you know, going

802
00:48:21,160 --> 00:48:24,640
Speaker 1: well so far, but then very quickly you read it

803
00:48:24,719 --> 00:48:27,480
Speaker 1: and and the part that talks about tokens is usually

804
00:48:27,560 --> 00:48:31,200
Speaker 1: some sort of decent distributed ledger which is not a

805
00:48:31,200 --> 00:48:33,759
Speaker 1: token based system at all. It's just an account based

806
00:48:33,800 --> 00:48:37,279
Speaker 1: system where you sort of have a slightly decentralized set

807
00:48:37,280 --> 00:48:40,799
Speaker 1: of accounts. Um. So, one of the people who's made

808
00:48:40,800 --> 00:48:44,520
Speaker 1: the case for central bank accounts for all the best

809
00:48:45,200 --> 00:48:48,560
Speaker 1: my friend Morgan ris Um and and for the record,

810
00:48:48,719 --> 00:48:51,319
Speaker 1: I agree that we definitely need central bank accounts for all.

811
00:48:51,800 --> 00:48:53,680
Speaker 1: Um We were just having this conversation on Twitter the

812
00:48:53,760 --> 00:48:56,680
Speaker 1: other day and he said, well, you know, you Rowan

813
00:48:56,719 --> 00:48:58,880
Speaker 1: are one of the only people who actually means it

814
00:48:59,000 --> 00:49:02,160
Speaker 1: when they say they want a token based system, because

815
00:49:02,200 --> 00:49:04,359
Speaker 1: mostly when I read about that stuff, they're just really

816
00:49:04,360 --> 00:49:07,319
Speaker 1: talking about other forms of accounts. And I said, yeah, look,

817
00:49:07,360 --> 00:49:10,359
Speaker 1: if if all you read was that stuff, I would

818
00:49:10,360 --> 00:49:12,600
Speaker 1: agree that it sounds like it's a tweetl d tweedle

819
00:49:12,680 --> 00:49:15,319
Speaker 1: dumb fight. You might as well just go central bank

820
00:49:15,320 --> 00:49:17,200
Speaker 1: accounts for all and just ignore the rest of it.

821
00:49:17,760 --> 00:49:19,799
Speaker 1: But that there is this other debate, There is this

822
00:49:19,880 --> 00:49:22,120
Speaker 1: other set of issues. And the reason I'm kind of

823
00:49:22,160 --> 00:49:25,560
Speaker 1: trying to sound the alarm is because we are not

824
00:49:25,600 --> 00:49:28,760
Speaker 1: going to have another chance to relitigate this the next

825
00:49:28,840 --> 00:49:33,560
Speaker 1: time around. Once we build an infrastructure for the future

826
00:49:33,600 --> 00:49:37,239
Speaker 1: of digital public money that is built around centralized accounts

827
00:49:37,440 --> 00:49:39,759
Speaker 1: and doesn't have a space for a token based cash

828
00:49:39,800 --> 00:49:43,279
Speaker 1: like instrument, it will be too late to undring that bell.

829
00:49:43,480 --> 00:49:45,239
Speaker 1: We will not go back forty years from now and

830
00:49:45,280 --> 00:49:48,640
Speaker 1: go whoopsie and get to rebuild the whole thing. So

831
00:49:48,760 --> 00:49:50,760
Speaker 1: this is a moment, like with the kind of building

832
00:49:50,760 --> 00:49:53,680
Speaker 1: of the Internet, where we are the last generation that

833
00:49:53,760 --> 00:49:55,839
Speaker 1: will remember that there was a choice to be had

834
00:49:55,920 --> 00:49:58,400
Speaker 1: here and we have an obligation, in my opinion, to

835
00:49:58,440 --> 00:50:01,120
Speaker 1: do something. So to go to your question China, UM,

836
00:50:01,160 --> 00:50:03,160
Speaker 1: I was visiting China and went to the PBOC and

837
00:50:03,400 --> 00:50:06,240
Speaker 1: spoke to the people who had their Monetary Payments division

838
00:50:07,040 --> 00:50:09,719
Speaker 1: UM only only in the end between nineteen and they

839
00:50:11,040 --> 00:50:14,600
Speaker 1: they use a term there that they call managed anonymity,

840
00:50:14,680 --> 00:50:19,120
Speaker 1: which means anonymity between payments operators and between you know,

841
00:50:19,680 --> 00:50:23,280
Speaker 1: people on either side of the transaction, but no anonymity

842
00:50:23,320 --> 00:50:26,600
Speaker 1: to the central government. UM. And I'm always reminded of

843
00:50:26,800 --> 00:50:29,400
Speaker 1: when you go on Facebook and there are privacy settings

844
00:50:29,440 --> 00:50:31,400
Speaker 1: and it says, you know, choose who you want to

845
00:50:31,400 --> 00:50:35,560
Speaker 1: see your your posts, but there's never a button that says, well,

846
00:50:35,600 --> 00:50:38,120
Speaker 1: I would like Mark Zuckerberg not to see my posts.

847
00:50:38,160 --> 00:50:40,479
Speaker 1: He gets to see everything, you know. He's like Tom

848
00:50:40,560 --> 00:50:42,560
Speaker 1: from my Space. He's the first friend of the last

849
00:50:42,600 --> 00:50:45,600
Speaker 1: friend on your friends list every time. So the Central

850
00:50:45,600 --> 00:50:49,080
Speaker 1: Bank of China is absolutely building a system where they

851
00:50:49,080 --> 00:50:51,480
Speaker 1: are your first and your last friend and they get

852
00:50:51,520 --> 00:50:54,400
Speaker 1: to see everything um, and they're going to frame that

853
00:50:54,440 --> 00:50:56,360
Speaker 1: in terms of law enforcement, just like the n s

854
00:50:56,400 --> 00:50:59,440
Speaker 1: A frames surveilling everybody in terms of law enforcement. And

855
00:50:59,480 --> 00:51:04,120
Speaker 1: now you is the most heinous, sort of morally objectionable

856
00:51:04,200 --> 00:51:06,560
Speaker 1: cases that they can think of for shock value. So

857
00:51:06,600 --> 00:51:10,200
Speaker 1: it will be terrorism, it will be money laundering for

858
00:51:10,320 --> 00:51:14,320
Speaker 1: big criminal gangs, it will be child pornography and sex trafficking,

859
00:51:14,840 --> 00:51:18,279
Speaker 1: and they will use those as as a justification for saying, well,

860
00:51:18,360 --> 00:51:19,960
Speaker 1: this is why we need to be able to see

861
00:51:20,040 --> 00:51:25,160
Speaker 1: everything everybody does all the time. Um. And what China

862
00:51:25,239 --> 00:51:30,080
Speaker 1: did do with this is how a massive industry of

863
00:51:31,120 --> 00:51:35,080
Speaker 1: the mobile payment companies we chat an alley pay that

864
00:51:35,160 --> 00:51:39,360
Speaker 1: we're just completely dominating, and they recognized to their credit

865
00:51:39,600 --> 00:51:43,319
Speaker 1: that this was an unstable, inferior form of money and

866
00:51:43,440 --> 00:51:46,840
Speaker 1: was carrying a kind of shadow banking like risk because

867
00:51:47,040 --> 00:51:50,920
Speaker 1: these large mobile payment companies were building their entire payments

868
00:51:50,920 --> 00:51:54,880
Speaker 1: infrastructure on top of the regular banking system. Like if Venmo,

869
00:51:55,000 --> 00:51:57,319
Speaker 1: you know, suddenly had a float the size of the

870
00:51:57,440 --> 00:52:00,799
Speaker 1: entire money market mutual fund industry before two thou and eight,

871
00:52:00,840 --> 00:52:03,440
Speaker 1: you go, well, wait a second, mobile money is going

872
00:52:03,480 --> 00:52:06,440
Speaker 1: to be the new shadow money that could collapse if

873
00:52:06,440 --> 00:52:09,839
Speaker 1: something goes wrong, and they, within the space of sort

874
00:52:09,880 --> 00:52:13,759
Speaker 1: of a couple of years, required those entities to get

875
00:52:14,400 --> 00:52:17,040
Speaker 1: direct accounts at the Central Bank and then to back

876
00:52:17,360 --> 00:52:20,400
Speaker 1: those accounts one to one with Central Bank reserved dollars.

877
00:52:20,920 --> 00:52:22,680
Speaker 1: And I think the next step you're going to see

878
00:52:22,719 --> 00:52:24,960
Speaker 1: is they're actually just going to collapse those two layers

879
00:52:25,200 --> 00:52:28,799
Speaker 1: entile so that the money going through those wallets, those

880
00:52:28,840 --> 00:52:31,799
Speaker 1: sort of mobile money wallets, will be directly central bank

881
00:52:31,840 --> 00:52:34,240
Speaker 1: issue money. And that's the final step of what they're building.

882
00:52:34,239 --> 00:52:40,240
Speaker 1: I think Rowan great. That was a truly fascinating conversation.

883
00:52:40,719 --> 00:52:43,320
Speaker 1: Thank you very much for joining us. Thank you so

884
00:52:43,400 --> 00:52:54,960
Speaker 1: much for having me, Tracy. I really like that episode.

885
00:52:55,000 --> 00:52:59,719
Speaker 1: I feel like Rowan brings such a range of insights,

886
00:52:59,719 --> 00:53:03,040
Speaker 1: whether or it's into the specifics of how money works,

887
00:53:03,080 --> 00:53:06,839
Speaker 1: how law works, the sort of civil libertarian bent that

888
00:53:06,880 --> 00:53:11,360
Speaker 1: he has. It's a very different perspective than almost anything

889
00:53:11,480 --> 00:53:14,439
Speaker 1: we've heard so far in some of the conversations we've

890
00:53:14,440 --> 00:53:19,520
Speaker 1: had about what money is or some of our cryptocurrency discussions. Yeah,

891
00:53:19,560 --> 00:53:22,319
Speaker 1: I was about to say exactly that. It's it's such

892
00:53:22,320 --> 00:53:26,640
Speaker 1: a different um position to be coming from, and he's

893
00:53:26,719 --> 00:53:30,799
Speaker 1: really bridging that space between cryptocurrencies and MMT, which kind

894
00:53:30,840 --> 00:53:34,399
Speaker 1: of naturally you would think wouldn't work, but there does

895
00:53:34,400 --> 00:53:36,600
Speaker 1: seem to be some overlap. The other thing I was

896
00:53:36,640 --> 00:53:41,160
Speaker 1: thinking about is the distinguishing in the cash system between

897
00:53:41,960 --> 00:53:46,720
Speaker 1: ledger based accounting versus that sort of token based system

898
00:53:46,760 --> 00:53:50,200
Speaker 1: of piment is a really nice framework to sort of

899
00:53:50,280 --> 00:53:56,080
Speaker 1: explain the difference in in privacy concerns for digital payment systems.

900
00:53:56,120 --> 00:54:00,480
Speaker 1: I really like that framework. Yeah, no, that's exact, actually right.

901
00:54:00,520 --> 00:54:04,200
Speaker 1: And then the question of can the state really offer

902
00:54:04,360 --> 00:54:07,279
Speaker 1: a digital token version. I mean, the nice thing about

903
00:54:07,560 --> 00:54:12,640
Speaker 1: cryptocurrencies is we know them. One thing they've proven is

904
00:54:12,680 --> 00:54:15,040
Speaker 1: that you can have a digital token, and that was

905
00:54:15,080 --> 00:54:18,960
Speaker 1: sort of Stosi's breakthrough, which is that I can own

906
00:54:19,120 --> 00:54:23,240
Speaker 1: something or I can control something that's digital that nobody

907
00:54:23,280 --> 00:54:26,000
Speaker 1: else has because of course digital you think file sharing

908
00:54:26,040 --> 00:54:30,200
Speaker 1: replication difficult to own. So that part has been established.

909
00:54:30,480 --> 00:54:33,759
Speaker 1: Now the question is whether the state, in theory or

910
00:54:33,760 --> 00:54:37,320
Speaker 1: central banks can apply that same principle, which they already

911
00:54:37,320 --> 00:54:40,360
Speaker 1: accept with physical cash, to the digital realm. And I

912
00:54:40,400 --> 00:54:44,880
Speaker 1: think Roman makes a really compelling case that they should,

913
00:54:44,960 --> 00:54:48,040
Speaker 1: and I love his point about like now is the moment,

914
00:54:48,080 --> 00:54:50,640
Speaker 1: because if we don't build this now into the money

915
00:54:50,680 --> 00:54:54,239
Speaker 1: system of the future. Forty years from now, when all

916
00:54:54,239 --> 00:54:58,120
Speaker 1: the infrastructure is in place and everyone is purely on

917
00:54:58,320 --> 00:55:01,360
Speaker 1: digital abs, and maybe the apps are collapsed and that

918
00:55:01,400 --> 00:55:04,400
Speaker 1: we're only using central bank money, the time will have

919
00:55:04,520 --> 00:55:09,279
Speaker 1: been uh, we won't be able to easily reverse engineer

920
00:55:09,400 --> 00:55:12,279
Speaker 1: a token element of the digital money system. Yeah. I

921
00:55:12,360 --> 00:55:15,879
Speaker 1: kind of wonder how many of the libertarian crypto enthusiasts

922
00:55:15,880 --> 00:55:19,200
Speaker 1: will heed his call to maybe, you know, work with

923
00:55:19,560 --> 00:55:24,640
Speaker 1: central authorities to figure out some form of public digital money.

924
00:55:25,120 --> 00:55:27,960
Speaker 1: I don't know, it seems like it seems like that

925
00:55:28,040 --> 00:55:29,680
Speaker 1: might be a big gask that You can see his

926
00:55:29,800 --> 00:55:34,600
Speaker 1: argument it's a lonely battle, right because among like the

927
00:55:34,680 --> 00:55:38,200
Speaker 1: people who believe in the legitimacy of public institutions, there's

928
00:55:38,239 --> 00:55:41,680
Speaker 1: a lot of skepticism towards the sort of uh, you know,

929
00:55:41,760 --> 00:55:46,200
Speaker 1: sort of extreme civil liberty, maybe anarchist bent about individual behavior.

930
00:55:46,360 --> 00:55:49,080
Speaker 1: And among the people who care about that stuff, primarily,

931
00:55:49,400 --> 00:55:51,880
Speaker 1: there is not a lot of people who believe in

932
00:55:52,320 --> 00:55:57,080
Speaker 1: uh strong public institutions. So I applaud Roman's lonely path

933
00:55:57,200 --> 00:56:00,320
Speaker 1: on this, and hopefully more people take them up. The

934
00:56:00,760 --> 00:56:04,200
Speaker 1: common area in that ven diagram is pretty small. It

935
00:56:04,280 --> 00:56:08,840
Speaker 1: might only be Rowan. In fact, it might all right, okay,

936
00:56:08,920 --> 00:56:11,920
Speaker 1: this has been another episode of the All Thoughts podcast.

937
00:56:12,040 --> 00:56:14,640
Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at

938
00:56:14,680 --> 00:56:18,040
Speaker 1: Tracy Alloway and I'm Joe wi Isn't though. You can

939
00:56:18,120 --> 00:56:22,080
Speaker 1: follow Rowan on Twitter at Rowan Gray. Also, he has

940
00:56:22,120 --> 00:56:26,920
Speaker 1: a book coming out in January one titled Digitizing the Dollar,

941
00:56:27,040 --> 00:56:30,040
Speaker 1: The Battle for the Soul of Public Money in the

942
00:56:30,120 --> 00:56:35,800
Speaker 1: Age of Cryptocurrency. Definitely going to be a must read,

943
00:56:36,160 --> 00:56:38,960
Speaker 1: so check that out. You can follow me on Twitter

944
00:56:39,200 --> 00:56:42,560
Speaker 1: at the Stalwart, and you should follow our producer on Twitter,

945
00:56:42,680 --> 00:56:46,560
Speaker 1: Laura Carlson. She's at Laura M. Carlston. Follow the Bloomberg

946
00:56:46,560 --> 00:56:50,759
Speaker 1: head of podcast, Francesco Levi at Francesca Today, and check

947
00:56:50,760 --> 00:56:54,560
Speaker 1: out all of our podcasts on Twitter at the handle

948
00:56:54,960 --> 00:57:03,600
Speaker 1: at podcasts. Thanks for listening to