Motley Fool Money

The War for Your Wallet

Aug 7, 2022
In this episode, Brett Scott, author of "Cloudmoney," dives into the battle between cash and digital payments. He discusses how the push for a cashless society changes our relationship with money, making it less tangible. Brett emphasizes that cash serves as an essential safety net, much like an emergency staircase. He also highlights the socioeconomic implications of moving away from cash, especially for lower-income communities. The discussion sheds light on how COVID-19 amplified these trends, raising concerns about personal freedom and financial inclusivity.
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INSIGHT

Fintech's Automation Focus

  • Brett Scott's work in high finance during the financial crisis revealed a lack of monetary system understanding among traders.
  • This led him to explore alternative finance and challenge the fintech narrative of disruption, finding it often just automates existing systems.
INSIGHT

War on Cash Incentives

  • The "war on cash" involves banks, payment companies, fintech firms, and governments, each with their own incentives.
  • Banks profit from controlling payment infrastructure, while payment companies like Visa and Mastercard lose revenue from cash transactions.
ANECDOTE

Casino Chips of Finance

  • Scott uses a casino chip analogy to explain how digital money works.
  • Banks act like casinos, issuing digital "chips" (account balances) that represent a claim on physical cash but can be created in excess of reserves.
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