The Breakdown - The Battle for the Future of Money, feat. Lawrence Summers, CZ, Michelle Phan, the Winklevoss brothers, The Chainsmokers and more. [Money Reimagined Episode 4]

Episode Date: May 30, 2020

As the economic dimension of the COVID-19 crisis comes into clearer view, what have we learned about the battle for the future of money? Does the dollar reign supreme? Are within-the-system competitors like the euro or China’s digital yuan gaining ground? Does an outside the system alternative like bitcoin stand a chance?  Over the last month, the “Money Reimagined” series has looked at the battle for the future of money.  Episode 1 focused on the dollar and why it is simultaneously stronger and more set up to fail than ever before.  Catch up: Why the Dollar Has Never Been Stronger or More Set Up to Fail Episode 2 was all about the obvious contenders to replace the dollar such as the euro or China’s currency, especially as they race towards a digital yuan. It also looked at where Facebook’s Libra might fit in the mix. Catch up: The Rise of the Dollar Killers Episode 3 looked at one of the most unique features of this modern currency battle - the fact that there are fundamentally new systems like bitcoin in the running. Can a non-sovereign currency actually be more relevant than global fiats?  Catch up: Where Bitcoin Fits in the New Monetary Order This final episode of the “Money Reimagined” series checks in on each of the previous episodes but brings a new set of voices to the mix. Between May 11 and May 14, CoinDesk hosted Consensus:Distributed, a virtual summit featuring some of the leading lights in crypto, finance, economics and pop culture. In this episode, we hear from those voices, including: Lawrence Summers - former U.S. Treasury Secretary Christopher Giancarlo - former Chairman of the CFTC Michelle Phan - YouTube innovator and founder of Ipsy Chaoping Zhao - founder and CEO of Binance  The Winklevoss brothers - founders of Gemini  The Chainsmokers - Grammy-winning artists  Carlota Perez - influential economist   

Welcome back to The Breakdown, Money Reimagined, a special podcast micro-series about the battle for the future of money in the post-COVID-19 world. This episode is sponsored by Aris X, the Stellar Development Foundation, and Grayscale Digital Large Cap Fund. And now, here's your host, NLW. Welcome back to the breakdowns money reimagined. Today we reach the final chapter in our four-part series on the battle for the future of money. The premise of this series is that there is an increasingly interesting competitive battle emerging for what the future of money will hold. In our time, that means not only what government-issued currencies will thrive, but whether

new forms of currencies have a chance, whether it's those issued by corporations or consortiums or decentralized networks or pseudo-anonymous monetary geniuses that drift quickly into the shadows never to re-emerge. Episode one was all about the great incumbent, the US dollar. Despite the ascendance of the money printer-go-burr-meme and the idea that excess money-printing should cause inflation, the U.S. dollar has gotten nothing but stronger over the course of this crisis. The place of the U.S. dollar in the global monetary order and the status of the dollar denominated debt in the world clearly creates a unique and perhaps unexpected reality.

Episode 2 was about the within-the-system contenders, the euro providing a regionally based alternative, China, with its aggressive digital yuan project, Libra with its would-have-been-could-have-been-could-been-modern-day bank-or, a return to the idea of a supernatural basket-based currency like John Maynard Keynes proposed and was summarily outvoted on at Breton Woods. Episode 3 was all about whether there was any possibility that an outside of the system contender had a chance at disrupting the very nature of the system. Bitcoin has created something completely unique, a fixed supply, non-sovereign, non-corporate currency that has attracted billions of dollars of activity and inflows,

plus a growing legion of passionate hodlers that increasingly include not just disaffected libertarians and cypherpunks, but the royalty of the financial establishment, looking warily at the prospect of future inflation. At the same time, during this crisis, while the Bitcoin narrative has seen serious inroads, it is USD-peg's stable coins that have seen the greatest growth. This episode is a catch-up on each of these concepts,

but with some new, conversationalists. Between May 11th and May 14th, CoinDesk held the first ever consensus distributed virtual summit, an event particularly suited to the era of COVID-19 lockdowns. This episode checks in on each of the three questions posited by the other Money Reimagined shows with a unique ensemble of guests. Lawrence Summers was the Treasury Secretary under President Clinton. He was a director of the National Economic Council under President Obama. He was a professor of economics and later president at Harvard University. In this clip, CoinDesk's chief content officer Michael Casey asks Summers what he thinks about the Fed's policy in the time of COVID-19 and whether he had

concerns about the independence of the Fed from the Treasury. I don't think there was a viable option if we were to preserve a viable financial system. This is one of three moments of existential threat after 1987, after after 2008, 2009, and now this in the context of the pandemic. I think it's important to recognize what's on the other side of the Fed balance sheet. This is not a case where they're issuing pure money, which by definition has a zero interest rate.

This is a case where they're issuing bank reserves for the most part, and those bank reserves will pay whatever interest rate the Fed sets. So in that sense, they have rather more the character of short-term government debt than of money. One would be a fool not to recognize that the inflationary risks, given the magnitude of this dislocation, are greater than they were three months ago.

But at the same time, there was a very famous letter written by a set of economists to Chairman Bernanke in 2010, in which they explained that the growth in the Fed balance sheet assured major inflation down the road. It's now pretty clear that that letter with respect to those events was wrong. And I think assurance that this growth in the balance sheet necessarily points to an inflationary period would not be a sensible judgment. I don't think the market participants who have traded break-evens down or reduced the price of commodity prices, even forward commodity prices, have necessarily been irrational. I think you're going to see more blurring of the roles of the Treasury and the Fed. You're already seeing it in these joint facilities that are being operated where the Treasury is providing the risk capital. When you think about issues relating to financial stability as central, when you think about bailout type activities as critical. So inevitably, there's going to be more overlap in the roles of monetary and fiscal policy.

So yes, I think that the high point of central bank independence has been passed. On the other hand, I think there is a reading of monetary history in which we had a major experience with unanchored money in the 1970s. and a very broad social lesson was learned. And so I think there will be closer relations between treasuries and central banks, but whether that points to a new inflationary era, I think that's more likely than I did three months ago, but it's not something I'd be prepared to go out and predict.

Summers also had a take on privacy and anonymous transactions that, frankly, defines a good part of the raise on debt for the crypto industry. I think the problems we have now with money involve too much privacy. I was one who pushed very hard for the step that Governor Draghi and his colleagues took to eliminate the 500-Euro note, or the new printing of the 500-Euro note. All you really had to know about those notes was that their nickname was the bin Laden to know that they weren't a very good idea. In a world of inordinate tax evasion, in a world with trillions of dollars of laundered money around corruption and the drug trade, I think the last objective of government policy should be

the promotion of anonymity with respect to large financial transactions. One of the financial community's accomplishments has been some progress with respect to issues around bank secrecy. And I would think it tragic if we were to turn backwards in some jurisdictions and an effort to get, some sovereignty revenue were to go into competition by offering anonymous stores of value. If there's a case for central bank digital currencies, I think it's exactly the opposite. I think it's a case that's around equalizing the playing field between smaller and larger players. And it's around making it more difficult for anonymous forms of finance to flourish.

But of all the important freedoms, the ability to possess, transfer and do business with multi-million dollars sums of money anonymously seems to me to be one of the least important freedoms that governments should be working to preserve. Christopher Giancarlo is another former U.S. regulator, the former chairman of the CFTC in this case. He is now focused on a new digital dollar advocacy project and argued at consensus distributed that the need for a digital dollar has only accelerated due to the pandemic. What the crisis has shown us is really the limitations of the traditional accounts-based, analog fiat-based system as we're faced with the need to get benefits to needy persons in the

economy, to keep the economy in neutral rather than going into reverse while we wait to reopen. But we're also finding that just money itself is a virus transmitter, and we need to deal with that. But there's been so many other issues that have been uncovered over the last few years, the cost and the slowness and the friction involved in global remittances. as well as international payments and wholesale payments as well. The dollar is a key part of infrastructure. It's a public good, but yet it also needs to be modernized. And as the world moves into the second stage of the Internet,

the Internet of Things of Value, the dollar itself needs to be future-proof for that new era, and it needs to be digitized and made to be able to be programmable. So we really feel that the time has come. As I said earlier, the great French writer Victor Hugo said, there's nothing more powerful than an idea whose time has come. We believe that the digital dollar is that powerful idea whose time has come. But what about the dollar competitors?

More on that after the break. Support for this podcast and this message come from Eris X. With ErisX, you can trade spot and regulated futures on cryptocurrencies through a licensed U.S.-based exchange. ErisX believes in fair access for all. Sign up today to take advantage of zero fees and learn more at erasex.com slash consensus. This episode is also sponsored by the Stellar Development Foundation. The Stellar Network connects your business to the global financial infrastructure,

whether you're looking to power or payments application, or issue digital assets like stable coins or digital dollars. Stellar is easy to learn and fast implement. Start your journey today at Stellar.org slash coin desk. Okay, back to the dollar competitors. First, let's listen to Eves Mearsh, a member of the European Central Bank's executive board, discuss the possibilities for a European digital currency. He expresses a somewhat different view than Secretary Summers on privacy and anonymity in that context.

A retail central bank digital currency could be based, for example, on digital tokens, which would circulate in a decentralized manner, that is, without a central bank, centralized ledger and allow for anonymity towards the central bank imitating a essential feature of cash. Some argue that a token-based digital currency might not guarantee complete anonymity and it could be designed in an intermediate way. If that were the case, this would inevitably however, raise social, political and legal

issues, especially in those countries for which it has been commonly accepted that banknotes are printed freedom. Alternatively, a retail CBDC could also, for example, be based on deposit accounts with a central bank. A CBDC of this nature would enable the central bank to register, of course, transfers between the users, it would have as an advantage to offer protection against money laundering or other illicit uses or what the ruler of the day considers to be illicit. And this all would depend on the degree of privacy that we would build into the design of such

a scheme. Of course, it's not just existing currencies like the euro competing for place in the battle for the future of money. In many ways, the most recent phase of the battle was prompted by the introduction of Libra. In this consensus conversation, author Dave Birch describes how the variety of actors have expanded because of the catalyst of Libra. All central banks are looking at this, but of course they're not the only people that are looking at it. And for people who come more from the tech side like myself,

I think it was not a hard conclusion to come to that the decentralization of money It would open up the possibility of more issuers. In fact, I wrote a book about that as well. So who those issuers might be, I'm not smart enough to know, but I know there's quite a lot of them. One category is central banks, but another category is private currencies. And because of Libra and Facebook,

that's what sort of set me thinking down this path. But the conclusion I began to come to, the more I looked at it, was that actually there are some other activities. I mean, Libra may well have been a catalyst to some of this thing. I don't think it is in the case of China. I think they've been planning it for a long time. But you see things like the Chinese digital currency and Libra beginning to emerge.

Now, as Naomi pointed out, up until quite recently, that was the preserve of, you know, techno deterministic, you know, cyber lunatics like me and actually many of your attendees. But last year when the Governor of the Bank of England stood up and said, what we need is a sick currency, you know, he said it's synthetic hegemonic currency, but I think sick currency is better marketing. He said, we need a sick currency. Well, he's not just some guy like me saying it. That's the governor of the Bank of England. And so then you began to see people whose opinions I really respect, you know, Nile Ferguson, who wrote one of the best books about the history of money, the assented money, when people like that start saying, you know, the US has

to take digital payments very seriously because there are issues of hegemony and by extension, and soft power, you begin to see some divergent opinions opening up. Larry himself last year said, you know, right now the network we have, he meant Swift. The Swift network doesn't work as well as it should. You know, Larry would favor putting effort into that rather than building alternatives. But when serious people like that start saying you have to pay attention, then you know something's going on. And, you know, you're talking about Christopher Giancarlo. he said a couple of months ago, it's kind of like a new space race, and I think that's true. In this clip, former Treasury Secretary Summers again shares his thoughts on the future of a Libra-like

model for a new global reserve currency, making specific reference to former Bank of England Governor Mark Carney's idea of a synthetic hegemonic currency. In other words, a modern version of Keynes Bankor to replace the US dollar at the center of the global monetary system. I think it's a long shot. I think it's a very long shot because I don't think there's the necessary political roots of consensus on how there would be global governance of a major currency. I don't think anybody's going to entrust that level of responsibility to the IMF or to an

institution like it or certainly not to the United Nations. And I think the experiences that currencies are like languages, once they become established and established in having a global role, there tends to be a lot of persistence just because of the network effect. So Mark could be right. He's certainly visionary on this. But I think Mark's other dream around much more active finance around global climate change is likely to happen much sooner than his bank core. I think it will be a pretty substantial step if we got as far as the substantial growth,

in SDRs, special drawing rights of the IMF that has been proposed. I'd be surprised if we saw this soon. In some ways, that means less public competition for private digital currencies. Libra itself has announced a number of changes during the time that we've been producing this Money Reimagined documentary series. They've added new association members. They've hired a slew of new high-profile leaders. They have distanced themselves further from Facebook.

And perhaps most important in the context of the money battle, they have backed away from the idea of the basket of currencies approach that some thought might be so disruptive. In this clip, Libra Association, head of communications, Dante Desparte, and Digital Dollar Project lead Christian Carlo, discuss why the projects are, in fact, compatible. Well, if you think of the conversation and everything that Chris Giancarlo said, Michael, I agree with. I think at the end of the day, you need this

kind of public-private collaboration to enable, in particular the last mile use cases, the user-directed peer-to-peer payment use cases can't happen at the type of scale that they need to happen if it's just singularly a public sector obligation. So I very much believe, and I think the association believes, that you can build digital commons and that those can be leveraged by public and private actors to try to empower people. And the last point I would make, to anybody expecting a vigorous debate between Chris and myself, they may be disappointed because I think the idea here is to really empower that public sector oversight of the financial system and the monetary system while at the same time empowering consumers, citizens, and users to have user-directed

payments. I don't think those goals are at all in opposition with one another. The Libra project and the digital dollar project are both addressing the same set of issues, and that is the antiquated nature of our accounts-based analog financial system as we go into a digital 21st century. We tip our hat to Libre because it's because the Libre Project and Bitcoin that we're having this conversation today. And as a believer in the marketplace of ideas, which is the genesis of all innovation, of all scientific discovery, the marketplace of ideas is what's going to produce the future of money. And so we have a lot to learn from each other. There's different approaches serving different imperatives, but all addressing the same concern about the antiquated nature of the traditional bank-based account system that goes back several centuries and is really going to be. challenged by this new wave of the internet of things of value.

Part of the justification given for Libra at Congressional and Senate hearings was the threat of a Chinese central bank digital currency. Giancarlo reinforces that point here, saying that part of the reason for a U.S. digital dollar is to have a global monetary standard that reflects Western values. We think it's critically important that a digital dollar have built into it as a design feature are Western values of an expectation of a degree of privacy in our use of money. Now, even with cash, let's be honest, there's a balancing between privacy rights and law enforcement rights right now. Under certain amounts, under $10,000, there's an expectation of privacy.

Above that, there's not for limited purposes, of government purposes of law enforcement and national security, not for purposes of monitoring. where you're doing your shopping or who you're giving your political contributions to, but where you're using your money that might violate law and national security. So there's always a balancing in a free market economy, in a democracy between the rights of the state to protect itself and to protect its laws and the rights of individuals to spend as they deem appropriate. And what we've got to get right in designing a digital dollar is that,

balance. If we get it right, and I believe we can get it right, a U.S. digital dollar, we believe, could be a preferred unit of sovereign currency. Caitlin rightly said that money goes where it's best treated. And I fully agree. And I think that we must make one of the design imperatives in designing a U.S. CBDC getting the privacy balance right. So people around the globe, there's, you know, there's always competition for use of currencies. If you look at history, more often than not, you had both sovereign currencies competing against each other, but also competing against commercial-driven currencies in the global world. It's the last several generation of the dollar's dominance and sovereign currencies dominance over commercial currencies is relatively

unique in human history. But whatever the case may be, we believe that it's possible, in fact, we believe it is an imperative to get this balance of privacy rights right in a digital dollar so that the dollar is seen as a reserve currency of choice, not of forced usage, but of choice. But what about the digital yuan as a competitor to a potential future digital dollar? In this clip, author Dave Birch and World Economic Forum blockchain leads Sheila Warren, discuss the soft power advantage of the US dollar and why every nation needs a digital currency strategy. I mean, I hate to be sort of blunt, but when you talk about the kind of Libra and Chinese digital

currency. And if you're saying to people, look, do you want to be surveilled by, you know, an unelected, you know, essentially, you know, dictator for life surrounded by a cadre of yes men that aren't actually accountable to the people that they serve or the Chinese communist. That's a, you know, that's a decision that people are going to have to make, right? Yeah, I think that you can't really separate cultural values and politics from this question. You know, I mean, certainly when it comes to civil liberties, there are very different definitions of what it means to have a society that's focusing on civil liberties or even social justice in different parts of the world. And those are political decisions to a large extent.

No, I agree with that completely. I'm not saying it to make a political point. I'm not saying which digital currency strategy is the best. I'm just saying that we should have a digital currency strategy. If, you know, because, you know, suppose, you know, right now the US dollar is about three quarters of international, you know, one leg of, about three quarters of international transactions, settles in dollars, that goes through in New York. That gives the US incredible soft power. It does. Absolutely. No question about it. So the question is, you don't have to replace all of that to have an impact on the US. What happens if 2%, 5%, 10% of those international transactions start to get settled in another, I mean, that's just for sake of argument. Let's say a Chinese

digital currency just to heighten the differences. Once 5-10% of that begins to be settled, then you have an issue. And actually, he didn't mention it, but Larry Summers was part of a war game last year. They ran a war game out of the Berkman Center, I think, looking at the impact of Chinese digital currency on the US dollar. And I can't remember the, I mean, the outcomes weren't good. I don't remember exactly what. I remember the North Koreans bought nuclear weapons.

That's right. It was very dramatic, as I recall. That's a bad, right? That's a, yeah. So whichever way you cut it, it doesn't need much of a shift to become a serious issue. So that's why I'm arguing that the UK, the US, the West should have a digital currency policy, even though I'm not smart enough to know what that policy should be. I think you have to have a digital currency strategy, regardless of the size of your economy.

You have to know this is coming. You have to be prepared for it. And you have to kind of, at this point, you're not even ahead of it. you're really just kind of keeping up, you know, with everything else is going on. But I also think that we tend to posit in this space, because this is very new, that they're all going to be somewhat monolithic, and it's just not true. The strategies will differ, but the implementation will also differ in very meaningful ways, and those have to do a lot, largely with politics to a large extent, and with kind of the norms around money in a particular society.

While much of this conversation so far has been about central bank digital currencies, one of the unique realities of this moment is that non-sovereign networks from outside the existing system are making meaningful advances towards the currency competition. More on that after this break. Support for this podcast and this message come from grayscale digital large-cap fund. In times like these, diversification is key. Consider grayscale digital large-cap fund, ticker symbol GDLC. It's the only publicly traded investment product that offers diversified exposure to large-cap digital currencies,

all from your brokerage account. For more information, visit grayscale.co slash coin desk. That's g-r-a-y-scale.c-o-c-c-o slash coin desk. Binance CEO, Chaoping Zhao, is intimately familiar with the new world of cryptocurrencies and what type of threat they might represent to the existing monetary system. He makes the point in this clip that the worst thing for the crypto world would be a loosening of regulation in the traditional system. In other words, Bitcoin and cryptos are at least in part a reaction to that traditional system.

What is the scariest regulation that you could think of being put on the crypto industry? So to be honest, it's actually counterintuitive. What would kill the cryptocurrency industry is if they make the regulations for the traditional fiat industries really, really relaxed and increase a lot of freedom. So if I'm able to send money, fiat money from any bank account to any other bank account, and I'm assumed I'm innocent until I'm proven duty, I can set large amounts, small amount at low fees, and I can invest in projects around the world with ease, if they make those kind of regulations, if they remove those kind of restrictions that we have on the traditional financial industries, that actually might actually, that would do much more damage to

cryptocurrencies and our business in turn. If that happens, we'll have to repeat the business somehow. But I would actually think that actually has a larger impact on a negative impact on cryptocurrency adoption, whereas if there are more and more restrictions being applied, it's counterintuitive. It's actually better for the cryptocurrency industry. Again, they can control, well, every regulatory body can control really hard on the cryptocurrency exchanges, but the centralized exchange is only part of the only part

of the ecosystem. If you really control that strictly, people are going to move some to decentralized exchanges, OTC, P2P trading. There's a lot of other venues that's not centralized. I'm actually less worried about them coming up with overly restrictive regulations. It just pushes people elsewhere.

The real thing that will slow down adoption of crypto is actually making the traditional financial industry more freedom driven. So that's, yeah, it's really, it's kind of intuitive. It is undeniable that since the crisis began, or more specifically, a massive uptick in central bank money printing in response to the crisis began, that the Bitcoin narrative, particularly with the comparison of the having, has gotten clearer. In this clip, Bitcoin author Safedin Amos explains, Well, you know, the hit of the addict always feels good when you first take it.

It's the withdrawal of that problem. So, you know, heroin would be a very good idea if it didn't involve with... roles, and I think the same can be applied to analyzing central banking actions. More generally, the problem, I think, is quite structural. And when we have a monetary system that's an advanced monetary system like Bitcoin, that is digital, that is apolitical, we can see the shortcomings of a debt-based system, which constantly, you know, periodically requires endless amounts of money printing and quantitative of easing and all of these processes take place. Sure, it might appear like the central banks are

being heroes for saving the day and for stepping in and for ensuring that things don't go too badly. But I think the real question that people need to be asking themselves is why does this monetary system require central banks to keep stepping in all the time? That's not normal. That's not healthy. And, you know, Bitcoin seems to be growing. and offering us a completely different alternative way of running this monetary system. You know, at the time when central banks are just finding more ways of or having to inject liquidity into their systems in order to prevent catastrophe and hope that this sticks this time and that they won't need to do something like this next time, Bitcoin's method of approaching

this is to just stick to its original schedule that it was specified before 2009. And, you know, we've seen over the last 12 years, many people have tried to change that schedule, but it continues to stay as it is. And I think this predictability and the use of a hard asset rather than a debt asset is what distinguishes Bitcoin from the central bankers currencies. And it's going to be fascinating watching over the next few years and a few decades how these two models unfold. On the one hand, we have a political model where money is made out of debt and it continuously requires political decisions and political bailouts versus a purely automated monetary system where pretty much everybody has given up on the idea of having any kind of discretion over the monetary policy. And the monetary policy just functions on its own with a hard asset that cannot be inflated easily. ShapeShift CEO Eric Voorhees reinforces this point, arguing that removing the ability of humans to charge,

change monetary policy is a powerful advance, as well as reminding us of the difference between printing money and creating wealth. Well, with Bitcoin, it removes the ability of humans to change the monetary policy. And ultimately, that's good in the same way that we don't have the ability to affect mathematics when we get scared about a virus. We don't have the ability to affect gravity or the changing of the seasons or how the planets orbit the sun. We don't have an ability to change any of that stuff when we get scared of a virus. And something is as crucial as money, which is the most important good in the society is how humans interact day to day with each other. That kind of thing should not be within the purview of any small group of people to unilaterally change. I think it will be very clear in the future, you know, five years, 10 years, 20 years in the future that,

that a group of central bankers deciding what the price of money should be will appear very, very foolish indeed. And in Bitcoin, that power is removed from people. And that's why ultimately it will be much more trustworthy over time. And it is why ultimately it will retain its value far better over time. Printing money does not print wealth. It does not print wealth. It simply rearranges how wealth works in society. And what you're doing is your essential taking wealth from the future and you're giving it to people today. And of course, people today, when you print that money, will feel good about that. The damage is distributed over time and the damage can be very pernicious and very severe. And to that person who said that, I think he could

make that argument if there was any plausible suggestion that the money would be destroyed after the crisis receipts. If the balance sheet of the Federal Reserve, actually went back to something normal after this. At least he could make that argument. I would still take other issues with it, but he could make that argument. But all of us know that the Fed's balance sheet will not return to anything normal. Indeed, it did not after the 2008 financial crisis. But don't forget this is not a, they did not borrow money this time. They printed money. There is a difference and it's important. Right. Right. Borrowing is more honest. Printing is just stealing. I mean, when you print, when you print money, you are

stealing purchasing power from all the people that hold money today and in the future. It is just theft. A pretty big pre-mine. It's a big pre-mine. It's a pre-mine which is not stated up front in the white paper. So it's more like a pre-mine that can happen at any time ongoing with no one clear on when it will occur or how big it will be. It's just theft.

The Winkle Boss brothers as well reinforced the importance of the health. having from a narrative standpoint and how far Bitcoin has come since the last time this happened four years ago. So when the first having happened, I think we didn't even know it was happening. It was so long ago. Obviously, the second one was a big deal. It seems like every four years, things improved by an order of magnitude, whether it's price, the human capital coming into space, the project. So I expect this four years to be the best for yet. Yeah, and I think the actual event tends to be a non-event, other than obviously the celebration and the milestone.

And that's really exciting. But I think a lot of sort of the reduced cell pressure and the actual economics start to kind of kick in and be felt generally a little bit after. Of course, this happening has COVID in the backdrop, which changes everything. And in many ways, sort of the stage for, a store of value like Bitcoin has been set.

So I think like a lot of the things that we've talked about, like Bitcoin being digital gold and safe haven and all that stuff, the talking points have been the same since, you know, we got into Bitcoin about eight years ago and the first halving. But the dynamics of fiat regimes has drastically changed. But it's not just these Bitcoin insiders that are excited. There is a clear pop culture clarity emerging where the narrative of Bitcoin, an alternative is taking hold. Listen to Alex Powell of the chain smokers, the hitmaking duo behind

songs like Closer, Paris, and something just like this, describe why this moment makes sense for investments around the Bitcoin industry. Well, I mean, I think it would be foolish to say that we all haven't been seriously affected in one way or another by this pandemic that's happening right now. But I think any smart investor sees the opportunity in times like this. Obviously, in 2008, when the crash happened, all sorts of amazing companies came from a new need from the consumer, whether that was Airbnb or companies like Uber or obviously Bitcoin in this case, which I think presents a really unique opportunity right now, the target investments and companies that play to those strengths.

Obviously, CASA is a great example of that. I think with the banks lending trillions of dollars, and there's uncertainty about what your money will be worth tomorrow, and obviously the benefit of Bitcoin is you own your money. and it's yours. But then you've got to think about security and how do you protect that asset that you own is yours now.

So companies like CASA are there to kind of solve that problem through their technology, which is created to be consumer-friendly and super safe and secure, as you mentioned before. Doubling down on this point is YouTube beauty influencer OG and massively successful businesswoman Michelle Fawn.

She argues that mainstream understanding is near but needs better education. I would say when I first started on YouTube in the beauty space, there was just a lot of mystery behind beauty. Makeup artists would have their secrets. And so the average consumer were not as educated about makeup techniques compared to today, 10 years later after YouTube. And so I could actually see the same thing happening in the crypto space, specifically in Bitcoin, because especially right now, we're in very interesting historic times where like the feds, they're just printing. so much money, I think like $6 trillion of just a stimulus package. And so I think a lot of people now are just questioning what money is and what money means to them. And I think the more they

start questioning and wanting to learn and understand more about money, the more they're going to be interested in sound money like Bitcoin, hard money like Bitcoin and gold. So I think it's just going to be extremely like interesting times that we're going to see right now where, one, the decentralization of just money in general. And similar to like, you know, you know, YouTube and beauty where YouTube decentralized content for the average consumer. Anyone could technically have their own TV show. Everyone technically could have their own empire in that sense. And same thing with beauty.

Beauty back then, there was a lot of the barrier to entry was much higher. You had retailers who were, it was pretty much a closed market. Retailers kind of controlled what consumers were seeing and understanding and buying and enters in beauty influencers. And they kind of disrupted that model and they democratize what beauty means. Beauty is not just a one-face fits all. Like it's very diverse. And so I see something like Bitcoin just really changing that space.

And that's why I'm really excited about partnering with Lolly on this too. Because a lot of my viewers and audience, they want to learn more about Bitcoin. They are interested in it. But one, maybe they might not have the money to invest in it right away, to buy any right away. And too, I think a lot of them are just confused with so much misinformation in this space. And so I feel like the best I can do is just offer, just offer like a better way to teach and share my experiences of Bitcoin. Because I don't think there's one authoritative figure in the space. I think most Bitcoiners can agree that we're all just learning.

And every single day we're learning more and more about this. And yeah, it's exciting times. Ultimately, though, the proof is in the pudding. While some pop culture influencers have been orange-pilled into Bitcoin, is there anything to suggest uptick during quarantine is actually happening? According to Catherine Coley, CEO of Binance U.S., the answer is yes. Yes, in fact, since the lockdown, we've seen the downloads for our app double, as well as the assets under management, go up closer to 60%. So we've been able to see just an influx of people adopting digital assets and wanting to be able to stay nimble. between these markets and traditional markets.

So that's really where we're seeing that participation. Why is the interest growing, in your opinion? Part of it comes from the accessibility of digital assets. It's 24-7. You can trade it from your phone or home. It doesn't have as many barriers to entry as other markets, and people can engage in more frequently, especially in these times where we're focused on staying healthy and at home.

So I think that's where we're seeing this pickup. In that essence, our OTC trade. is really to be able to provide an easier way for folks to be able to buy larger than $10,000 amounts in lump sizes that don't go through our order books. So anonymity is something that often market players are asking for. This was validated by Ray Yusuf, CEO of Paxville, who points to emerging markets like Africa and Latin America as key drivers. We've noticed a 20% rise across revenue all across the board and a 30% to 40% rise in

sign-ups on average, but Africa and Latin America are leading the way. In fact, all emerging markets are. There's immense demand there for Bitcoin retail demand based on real use cases, including wealth preservation. You know, for example, Nigeria. The past four years, the currency is depreciated by over 60%. And that's only continuing to rise. The currency wars aren't going anywhere and they're driving a lot of refugees to Bitcoin. Now, there wasn't a total unanimous belief in Bitcoin on display at consensus, Carloa Perez, the hugely influential thinker on the economics of technology revolution, shared the skepticism of a truly leaderless system.

This is what she had to say in response to a question from investor Chris Berniske about whether a new decentralized model of governance could be at the center of a new default model more broadly. You know, that sounds so nice. But I have a problem with it. I do agree. It's a great new governance thing. But have you ever tried to organize a community?

Have you ever tried to organize any sort of group? Do you know what it's like to organize a group without a leader where everybody is the same? I was a boss once. I tried not to be a boss. I hate being a boss, but I was in my country. I was the head of a technology directorship in a ministry. And I said I would accept the job as long as I could. could have everybody participate equally and so on. Well, I almost, I almost resigned. When

trying to do this, I realized that without being a leader, I could not get anything done. So I don't know if you believe that without a leader, you can have a good organization. It sounds very nice, but I'm sure you've got to solve it somehow that this idea of having a sort of anarchic, stateless, nobody leads, everybody's the same. If you believe that, maybe it can happen in some cases, I have never seen it happen properly. And the hippie communities that try to do things like that ended up in chaos. So I'm not so sure. I really think that stateless utopias, libertarian utopias are as flawed as communist utopias. Too much state or too little state, they're both really bad.

So I think maybe we have to see a place. I'm sure there is a very important place for blockchain. But I'm not sure it's in order to eliminate the state. So after all this, what is the takeaway? The battle for the future of money is a battle that is just beginning. What has become clear during the COVID crisis is that the dollar remains incredibly strong. so strong, in fact, that it is sucking in value in the form of stable coins and causing problems with other fiat currencies, particularly in emerging markets.

Other reserve currencies like the euro are struggling with questions of political will. China's digital yuan is steaming ahead, but China itself also faces serious political questions about its handling of the crisis. Bitcoin has undeniably achieved a new level of narrative relevance, not only from the pop culture icons, but also by a growing cadre of influential investors. This was exemplified when Paul Tudor Jones made a full-throated argument for Bitcoin as a hedge against what he believes is coming, a great monetary inflation. And ultimately, that's the question. What is coming? In many ways, the battle for the future

of money can't be predicted without being able to predict the coming set of not only economic, but geopolitical events. For now, what remains true is that there has never been a more active conversation and a wider set of possibilities for the future. Thanks for listening to The Breakdown's special Money Reimagined series for CoinDesk. Until next time, be safe and take care of each other. You've been listening to The Breakdown, Money Reimagined. Our theme song is Faith in My Money, Money, Pryn, a new track by DJ Jay Scrillo, which is available as part of his newly released Sound Money album.

This episode featured content from NLW, Lawrence Summers, Christopher G. Carlo, Yvesse, Mersh, David Birch, Dante Desparte, CZ, Safte, Saftein, Amos, The Winklevoss Twins, Michelle Fan, Catherine Coley, Ray Yousaf, and Carlotta Perez. This episode was written and produced by NLW, announced and executive produced by Adam B. Levine, edited and scored by Adam B. Levine and Rob Mitchell. While this is the last episode in our story so far, the outcome, or even a cohesive vision for money reimagined as our world changes is far from over. Subscribe to the CoinDest Podcast Network.

wherever you get your podcasts for new episodes of The Breakdown and other original thoughts served up fresh daily as the battle for the future of money rages on. If you're still listening, we'd love to hear what you think about this special series, our podcasts in general, or anything else. Send us an email at Podcasts at CoinDest.com or leave us a podcast review on your preferred platform. On behalf of NLW and the entire team at CoinDest, thanks for listening. and bail out for banks