On The Brink with Castle Island George Selgin (Cato Institute) on Stablecoins, Bitcoin, and Free Banking (EP.234)
Aug 2, 2021
01:11:40
George Selgin, director of the Center of Monetary Alternatives at the Cato Institute joins the show to discuss Bitcoin, Free Banking, and stablecoins. In this episode:
- Why George refers to Bitcoin as a synthetic commodity money
- Why George was excited by the possibility for synthetic commodity money
- What conditions would have to hold for Bitcoin to be considered money
- Why money is a spectrum rather than binary
- Are stablecoins prone to bank runs?
- Is Tether's melange of underlying collateral sufficient?
- How should stablecoins be regulated?
- Why are regulators looking into stablecoins today?
- Comparing stablecoins to Money Market Mutual Funds
- Why money market funds broke the buck in 08
- Are stablecoins as systemic as money market funds?
- George's objections to Gorton and Zhang's paper on free banking and stablecoins
- George's definition of free banking
- Was the 1830s-60s period in the U.S. a period of genuine free banking?
- The actual causes of bank failures in the pre-Civil War period
- Why 'unit banking' was so fragile
- What lessons can be taken from Canada's experience with free banking in that era
- Why the history of Free Banking is a red herring in the stablecoin debate
- George's recommendations for a primer on free banking
- George's reflections on Hal Finney's reference to his work
- Why bank failures are often the consequence of regulation
Content mentioned in this episode:
- Selgin, Synthetic Commodity Money
- The Alt-M Blog
- Selgin, Money Free and Unfree
- White, Free Banking in Britain
- Selgin, The Theory of Free Banking
- Dowd, The Experience of Free Banking
- Gorton and Zhang, Taming Wildcat Stablecoins
Sponsor notes:
- This episode is brought to you by Withum, a top 25 accounting firm with a cutting-edge Digital Currency and Blockchain Technology practice. To learn more, visit withum.com/crypto.