Izabella Kaminska and Claire Jones, June 25:
At its root, money is an IOU – a promise to give the bearer the option to own something they want at some point in the future in return for services rendered in the present. Yet when we pay for something, we have little idea of the journey our money has been on, nor of the tasks performed – previous to our own – to acquire it. Could that be about to change?....MUCH MORE
According to Hyun Shin, of the Bank for International Settlements, it might. He told us this week:
The beauty of money is that you don’t need to know the whole history – that I am holding it, is enough for it to be worth something to the next person, even though they don’t know how hard I had to work to acquire it.Shin first raised the possibility of a mass ledger of our money’s memories back in the summer of 2018. As central banks move closer to making state-backed digital money a reality*, in the form of central bank digital currencies (CBDCs), we could be about to see vision become reality.
But money is also a social convention – there is a whole record that’s somehow captured in that paper. In theory, if you can have a complete ledger, you can have a complete institutional memory. That theory has long existed, but it has been a twinkle in people’s eye. What technology has done is enable an abstract idea to become concrete. You can construct that ledger and you can do it electronically and use the best of data.
But what are the consequences of money suddenly having a universal memory? And are they necessarily all good?
A common root
To explain why the dawn of monetary memory matters, we need to understand what happens right now....
Considering the recent unpleasantness I think I'd prefer that money doesn't sprout ANYTHING.
(along with mortgages, securities and all the other ephemera one collects)
Oh, spouting. Well I do that.
