Monday , April 12 2021
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Jp Koning
Working in the bowels of the finance industry. Blogging about monetary phenomena is my side gig.

JP Koning: Moneyness

Moneyness is an economics blog by JP Koning about economics, money and finance. He adds an unique perspective to money-related issues, and explains everything very clearly, this combination sets him apart.

From Circle-of-Gold to Mega$Nets to Bitcoin

We tend to dismiss chain letters as mere scams or frauds. In this post I want to get readers thinking about chain letters as a type of financial innovation, one that has been steadily updated over the decades.Chain letters are lists. That list is governed by a rule: the first people on the list are to be paid by the latecomers. The chain letter stop working, or paying out, when no one else wants to join up. The amount of money flowing to early-birds who joined the list is equal to the amount...

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Hacksilver

1. Over the last month or two I've been following an interesting archaeological debate over the discovery of coinage. I thought I'd share it with you.2. It's generally accepted by archaeologists and numismatists that the first coins were invented in Lydia, modern day western Turkey, in the 7th Century B.C.E. (i.e. 610 B.C.E. or so). The idea quickly spread to Greece. The Lydians used electrum, a strange silver/gold mix, to make their discs. (I wrote about electrum coins here). I've included...

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Tether, a bigger badder PayPal

My recent article on Tether, a stablecoin, was just published at Coindesk. In the article I commented on Tether's recent settlement with the New York Attorney General's office. Because the settlement forces Tether to adopt a bunch of new practices, I think it's a win for stablecoin consumers. Why have I been focusing so much of my time on Tether stablecoins? Diligent readers will recall I wrote about it twice last month. (1 | 2 ).First, I've been writing about stablecoins for a long time...

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Ponzis and bitcoin as a response to a bad economy: the case of Nigeria

Usually when I think about gambling and speculative excess, I've always associated it with giddy prosperity. When an economy is doing well, productivity is improving, new technology is being introduced, and unemployment is low, people have extra income that they can throw away at the casino. Or they put it into their brokerage account and, with the help of margin, generate speculative bubbles.But lately I've been rethinking this view. Speculative bubbles and over-gambling are just as likely...

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Defining the “regulated” in “regulated stablecoin”

1/n This is a thread on what is means to be a "regulated stablecoin." (This was originally meant for Twitter, but I didn't feel like wrestling with the 240-word limit and threading, plus it got a bit long, so now it's a blog post). 2/n People in the cryptocurrency space often use the term of art "regulated stablecoin." No one has a monopoly over what "regulated stablecoin" means. It is a community-defined term. It's not terribly well-defined. But it should be.  3/n It should be well defined...

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The fabrication of trust in various types of dollars

How are we consumers to know whether the dollars that financial institutions provide us aren't fraudulent dollars? On what basis can we assume that the funds we hold at PayPal, for instance, or in Cash App, are "good money"?It's an age-old problem. If you were alive in 1889 and someone offered to pay you with a $10 note from Banque d'Hochelaga (see below), a privately-owned Montreal-based bank, how could you know the issuer wasn't a fraud and that it had enough assets on hand to always...

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The unbanked, the post office, and fintech in the 1880s

"A large population of people are excluded from the financial system because they don't have bank accounts. Fintechs compete to connect them and parallel plans emanate from the government to reach the unbanked, including postal banking." What year am I describing in the above paragraph? It could be 2021. But it also describes 1870s. It's 2021 and the U.S. still has a large population of unbanked, those who have so little money that banks would rather not serve them. An astonishing 5.4% of...

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Dolphin Safe Tuna and Fair Trade bank accounts?

The Royal Bank, Canada's largest bank, says that it won’t lend to clients that get more than 60% of their revenue from thermal coal or coal-fired power generation. Should a bank be able to avoid providing services to businesses just because they don't engage in the sorts of activities the bank, or its depositors, approve of? Put differently, should the Royal Bank be able to avoid "dirty" loans so that it can offer its depositors the semblance a Fair Trade, or green, bank account?Critics...

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Judy Shelton at the Bank of Canada? No thanks

How would I feel if Judy Shelton was a candidate for Governor of the Bank of Canada? Here are my thoughts.A bit of background first. Judy Shelton was a Trump appointee to a key spot on the Federal Reserve board, the U.S.'s central bank. A President's appointees must be confirmed by Congress, and this was probably the most heated confirmation process I've ever followed. Shelton has espoused several controversial view points, including a return to the gold standard. The reason this appointment...

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Stablecoins as a route into Venezuela?

Over the last decade, few nations have experienced as much monetary and payments chaos as Venezuela has. Fans of bitcoin, Dash, and other cryptocurrencies have all tried to help by introducing Venezuelans to their preferred coin. But even with Venezuela's bolivar currency entering hyperinflation stage, cryptocurrency adoption never happened. Circle, a U.S.-based company that issues the stablecoin USDC, is the latest to join the Venezuelan crusade. Last week it belatedly announced that it had...

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