The Breakdown The Stablecoin Free Banking Debate—What History Really Says
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Aug 3, 2025 Dive into the intriguing comparison between modern stablecoins and 19th-century free banking. Discover how historical chaos often stemmed from poor regulation, not private money. Successful case studies from Scotland and Canada highlight the potential of minimal regulation. The discussion unveils the resilience of stablecoins, showcasing how they leverage technology and regulatory frameworks to avoid past pitfalls. This fresh perspective redefines our understanding of currency stability and its future in the crypto landscape.
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1850s American Banknote Discounts
- In 1850s America, banknotes from distant banks often traded at a discount due to redemption inconvenience.
- The barista would only accept notes at a discount based on their issuing bank's location and trust.
Scottish Free Banking Success
- Scottish free banking between 1716 and 1845 was highly successful and stable with minimal regulation.
- Competitive market forces and gold-backed notes kept banks honest and stable in Scotland.
Canadian Free Banking Stability
- Canadian banks from 1817 to 1890 privately issued currency with minimal interference.
- Canadian banknotes circulated at face value nationwide despite primitive infrastructure and had few failures.