2. What is money?
Money is memory
Narayana R. Kocherlakota, 1996
The unique quality of money is “The ability to buy”
salability, liquidity, moneyness…
For something to be money it must be as […] as possible.
Scarce
Durable
Portable
Divisible
Identifiable
Uniform
Focusing on the three functions (unit of account, medium of exchange, store of value) is a
distraction
1. It’s a result rather than a cause
2. The functions are separable
Technology changes how
different “objects” satisfice
these criteria
3. Who can create money?
“No one” Private companies Governments
Commodity money Credit money Fiat money
4. Who ends up creating money is determined by
power structures and technology
Commodity money is inherently decentralized and independent of centralized
power Central banks derive their power from the need for final settlement in a credit
money based payment system and depend on centralized power
10. What is the point of a permissioned blockchain network?
Shared infrastructure and interoperability
And no need for the clearing house But nothing new
11. Consortium based (creationistic) mega-projects tend to fail
A complex system that works is invariably
found to have evolved from a simple
system that worked.
A complex system designed from scratch
never works and cannot be patched up to
make it work.
#3
16. Bitcoin
How? What?
• Commodity money
• Decentralized
• Use a Public and Permissionless blockchain
Can replace the correspondent banking system
Bitcoin is born on the blockchain as a “minable” digital commodity
money
20. 1: Deposit money to a
smart contract
DAI (Maker DAO)
How? What?
• Credit money (controlled by a DAO!)
• Decentralized
• Use a Public and Permissionless blockchain
Fast growth and relatively stable peg
2: Take out a dollar
denominated loan
3: Repay the loan
0
20 000 000
40 000 000
60 000 000
80 000 000
100 000 000
120 000 000
des.17
mar.18
jun.18
sep.18
des.18
mar.19
jun.19
sep.19
Circulating supply
0,9
0,95
1
1,05
1,1
des.17
mar.18
jun.18
sep.18
des.18
mar.19
jun.19
sep.19
USD/DAI
21. DAI is increasingly being used for real transactions
not just decentralized leverage
22. Abra
How? What?
• Synthetic fiat/credit money (CFD settled in BTC)
• Centralized
• Use a Public and Permissionless blockchain
1. The User lock in the asset value (e.g. 200 USD)
2. Abra varies the amount of BTC to match the asset value
23. With Abra, anyone in the world can hold «any asset»
as long as they are not US citizens
24. USDt, USDc, Paxos…
How What?
• Tokenized credit money
• Centralized
• Use a Public and Permissionless Blockchain
26. JP Morgan coin
How? What?
• Credit money
• Centralized
• Use a Private and Permissionled blockchain (Quorum)
Currently in development
27. Libra
How What?
• Fiat money (collateralized)
• Centralized
• Use a Private and Permissionled (Libra Blockchain)
Libra coin
Libra Reserve
Backing assets
Asset
Yield
Libra
Investment
Token
Government
securities
Bank deposits Other
low-risk assets
Libra Association
Libra/Facebook as the
government
29. «China-coin»
How? What?
• Fiat money
• Centralized
• Private Permissionled
China has had a version of CBDC for a while
?
30. “It may not be wise to dismiss virtual currencies”
“citizens may one day prefer virtual currencies,
since they potentially offer the same cost and convenience as cash—
no settlement risks, no clearing delays, no central registration, no
intermediary to check accounts and identities.”
“virtual currencies might just give existing currencies
and monetary policy a run for their money”
![What is money?
Money is memory
Narayana R. Kocherlakota, 1996
The unique quality of money is “The ability to buy”
salability, liquidity, moneyness…
For something to be money it must be as […] as possible.
Scarce
Durable
Portable
Divisible
Identifiable
Uniform
Focusing on the three functions (unit of account, medium of exchange, store of value) is a
distraction
1. It’s a result rather than a cause
2. The functions are separable
Technology changes how
different “objects” satisfice
these criteria](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)