The Historical Roots of Stablecoins

Welcome back to the Fintech Takes podcast. I'm Alex Johnson, joined by Mike Hsu, former Acting Comptroller of the Currency.

I recently crossed paths with Mike at the Bank of North Dakota's fintech and stablecoin event in Fargo, where he led a 90-minute session on stablecoins from a policymaker's perspective. It was so impressive I wanted an interactive version for the podcast.

In this episode, we trace the historical lineage of stablecoins from free banking before the Civil War, through the Eurodollar market, money market funds, Satoshi Nakamoto's white paper, and Facebook's Libra announcement … all the way up to the GENIUS Act.

All regulation is path-dependent. To understand why policymakers react the way they do to stablecoins, you have to understand what shaped them.

Mike’s reading (and listening) recommendations from the episode:

Bank Notes and Shinplasters by Joshua R. Greenberg: https://www.pennpress.org/9780812252248/bank-notes-and-shinplasters/

Ways and Means by Roger Lowenstein: https://bookshop.org/p/books/ways-and-means-lincoln-and-his-cabinet-and-the-financing-of-the-civil-war-roger-lowenstein/317ffa9e260a1186

"Are Banks Special?" by E. Gerald Corrigan (Minneapolis Fed, 1982): https://www.bu.edu/econ/files/2012/01/Corrigan-Are-Banks-Special_main-text.pdf

Odd Lots, “The Hidden History of Eurodollars, Part 1: Cold War Origins:” https://omny.fm/shows/odd-lots/the-hidden-history-of-eurodollars-part-1-cold-war

Satoshi Nakamoto's Bitcoin white paper: https://bitcoin.org/bitcoin.pdf

Facebook’s Libra: https://en.wikipedia.org/wiki/Diem_(digital_currency)

Circle's Arc litepaper: https://arcnetwork.xyz/litepaper

Boom: Bubbles and the End of Stagnation by Byrne Hobart and Tobias Huber: https://press.stripe.com/boom

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