February 19, 2024 • 29 mins
Dr. Dan Sutter, of the Manuel Johnson Center for Political Economy, hosts EconVersations, a program that explores the role of free markets in promoting prosperity through conversations with Manuel Johnson Center faculty and guests. In this episode, Dr. Sutter interviews Dr. Scott Burns of Southeastern Louisiana University, as they discuss The Economics of a Central Bank Digital Currency.
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(00:00):
the opinions expressed on
this programrepresent the viewpoints
of individual authorsor contributors
and do not necessarily reflectthose of Troy University.
This is, in conversations,
a joint production of TroyTelevision and Emmanuel H.
Johnson Centerfor Political Economy.
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Now here's your host, Dr.
Dan Sutter.
Helloand welcome to Conversations.
I'm your host, Dr.
Dan Sutter of the Johnson Center
for Political Economyat Troy University.
Money is indispensableas a medium of exchange.
And throughout its history,
the form of money has changedand evolved
as bankingand finance has moved online.
(00:43):
It only makes sense
that money will frequentlybe virtual as well.
The Federal Reserveand the US Treasury Department
are exploring the potentialfor a central bank,
digital currency,or a digital dollar
that could potentially replaceour current dollar.
Over 100 countriesin the European
Union are also exploringthe possibility
of a central bankdigital currency as well.
(01:04):
What would
be the economic benefitsand costs of
such a move or a digital dollar?
Joining me to talk about thison the show today is Dr.
Scott Burns, use a professorof economics at Southeastern
University, SoutheasternLouisiana University.
And I thinkI'm going to Louisiana.
(01:25):
He earned a bachelor's degreefrom LSU in Masters and Ph.D.
degrees from George MasonUniversity.
He's published over a dozen
journal articles
in outlets like the Journalof Institutional Economics,
the Journal of RegionalRegulatory
Economics, the Cato Journal
and the Journal of PrivateEnterprise.
Prior to teachingat southeastern Louisiana, Dr.
(01:46):
Burns taught at Troy University,
and he was partof the Johnson Center.
So welcomeback to the conversation, Scott.
Thank you.
And it's really goodto be back on.
Well, let's get started here.
And I mentioned that moneyis a medium of exchange.
This is a term
we certainly introducedto our students in economics.
But remind us briefly,what exactly does a medium
(02:08):
of exchange do for us?
Well,I think a good little thing
at the beginningof your description
is that money is a commonlyaccepted medium of exchange.
There's a whole bunch of things
that we could useas medium of exchange.
That just means things thatwe can use to facilitate trade.
You know, we can think aboutthings like barter transactions.
You and I can conductbarter transactions
(02:29):
where we're split, where we aretrading one good for another.
But that's extremely costlyto try to do that.
If you and Iare trying to engage in
barter transactionswhere you trade me your time
in exchange for my suit to bea very bad trade, by the way.
But nevertheless,
those are very difficulttransactions to conduct
because we have to find goods
that both you want and I haveand that I want that you have.
(02:52):
That's not always going to beeasy to do.
It's a lot easier to engagein trade with people
when there's a commonly acceptedmedium of exchange.
One good that we know that
everybody valuesfor the very good,
even if we don't want todirectly consume it ourselves.
We know that we can easilytrade it in exchange
for thingsthat we actually want.
This is a big reason whythen things like gold and silver
naturally emerged over time
(03:13):
as money, as commonly acceptedmediums of exchange.
Because even though you andI might not get over silver,
we might not use itto build our houses
or our toiletsor anything like that.
We know for a factthat if we trade
and receive gold and silverin exchange,
it's pretty easy to tradethat for the things we want.
And so that's the ideabehind money.
Money facilitates exchange.
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The way that we placein economics,
money reduces transactions,and so it makes it easier,
in other words, for us to engagein transactions.
You get the thingsthat we ultimately want.
We mentioned gold and silver.
Those were thingsthat kind of naturally emerged
over time as moneybecause they were
they contained all the key
characteristics of peoplelook for money or portable,
they were divisible,
(03:54):
or you can break them into
smaller and larger
denominations that arefairly uniform and value, etc..
But as you're kind of alludingto, money
evolves a lot over time.
How much money that we usedoesn't come in a physical form
like that.
Gold and silver coinsthat we buy to use five
or ten years ago or even mightbe physical pieces of cash
that we use today
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and that we've used a lot over
the past century in the USeconomy.
Now, I'd say the vastmajority of transactions
are not conductedusing paper currency or COIN
conducted digital.
So the question thatwe're really getting into today
with virtual bankdigital currency,
you're going to hear me say
Cbdc sometimes is kind ofan abbreviation for central bank
digital currency,but that's basically the Fed,
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the Federal Reserve,the central bank, United States.
Their way
of trying to get into
this digital money marketand provide
their own form of digital money
rather than relying on privatebank software instead.
So let's talk about one thingthat you mentioned about money
going online.
People hear about Bitcoinand cryptocurrencies
and they might think, well,they wouldn't.
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You thinkthink of a digital dollar?
Is that just another form
of bitcoin or a cryptocurrencyor what's the difference?
So there is a key distinction.
Central bank, digital currency
is dollardenominated and Bitcoin is not.
What I mean bythat is basically this,
even though they are bothpotentially digital
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with something like Bitcoin.
Bitcoin is its ownkind of form of money.
It's not denominated in dollarsto a lot of people who transact
in bitcoin very quicklywill cash that out into dollars.
But you actually don'tdenominate anything.
You don't have to denominatebitcoin transactions in dollars.
It's kind of its own monetarystandard
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that makes its own formof what we a monetary
economics might call a basicor outside form of money,
something that's not issuedby the banking system
that's treatedas an ultimate form of money.
Central bank digital currency
is ultimately nominated in U.S.
dollars.
It's not a separate formof outside money.
And one of the benefits the U.S.
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government of that is
things like Bitcoin arekind of a threat to the U.S.,
not least potentiallyif a bunch of people
look using dollarsand started using Bitcoin,
then that would threatenthe US reserve currency status.
It will threaten
a lot of the kind of influencethat the Federal
Reserve has over not just the US
making system and money supply,but the global monetary system.
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But central bank, digitalcurrency wouldn't do that.
It's still dollar denominated.
It's not a separateform of money.
It's just another paymentmechanism, basically.
And so that's one of the reasons
why the Fedis interested in this.
They see the competitioncoming from
not just Bitcoin, but all the
all the other cryptocurrenciesout there
and even other central bankstalking about experimenting
with cryptocurrencies,
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central bank, digital currency,
and the Fed basically sayingwe want to be ahead of the game,
we want to stay aheadof the game
and potentially offerthese services ourselves
so that other countries,other central bank
and other private companiesand monetary issuers,
cryptocurrencies don't beat usto that digital marketplace.
And it's importantto remember that at this point
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the Fed is only thinking aboutthe possibilities
with a central bank,digital currency,
nothing, certainlyany kind of concrete plan.
So as we talk aboutsome of these aspects with it,
nothing'swritten in stone in terms of
or even whether we're going
to go forward with a digitalcurrency where so
we're going to be talking aboutsome possibilities here.
(07:27):
These are not necessarilythe certainties
of what's going to happen right
at one levelwhere there's some distinction
about where
the path that digital currencyor digital dollars could go
forward is a distinctionbetween a retail central
bank, digital currency,and a wholesale central bank.
Digital currency.
(07:47):
So if you could explain for uswhat this
this difference would be.
Yeah, that'sa very important distinction.
A retail cbdc a retail centralbank, digital currency.
That means that a central bank
like Federal Reserveand our nation, United States,
would be offering these cbdcaccounts directly to the public.
Cutting out the middleman,a bank, in other words.
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So what that basically means,if you have a retail CBD,
then in theoryyou could open an account
at the Federal Reserve
Central Bank, nine statesright now, you and I,
as private individuals,we can't do that.
The Federal Reserve is whatwe might call a bank, respect
the central bank, basically,meaning that it serves
as the bank for all the banksin the banking system.
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Now, banks settle paymentsbetween them is where
the clearinghouse is located.
It's basically just a bankers.
But one of the ideas thatsome people put forward for Cbdc
is while we make the FederalReserve open not just to
banks in the United Statesbut to everybody,
some people call the centralbank role or banking role.
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We talk about ideaslike gut accounts,
which is basically justthis idea of letting ordinary
individuals open up a savingsaccount, a checking account
at the Federal Reserve itself,cutting out the middleman
of usingprivate things themselves.
At first, this idea of
cbdc might seem like a good idea
way of streamlining
the banking systemby cutting out the middleman
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of other banks.
Just letting people go.
This could
go to the Federal Reserveto open accounts,
but you and I have been teachingeconomics for quite some time.
And one of the things
that we teach a lot of our microone on one classes
is that middlemen are notnecessarily bad for the economy,
especiallybecause a lot of times
middlemen offer servicesin facilitate transactions
in ways that actually increaseeconomic efficiency.
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Just to use an example,
Amazon doesn't really produceanything directly,
but Amazon is mostly a littleyou're facilitating transaction.
You're helping me connect toa shirt producer in Bangladesh.
I can get a shirt more easilyall by digitally,
and I wouldn'tbe able to do that much.
I'm not going to get on a planeand fly to Bangladesh to
price compare shirtsmade there versus gear, etc.
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So you would agree that Amazonand eBay and companies like that
provide really efficientmiddleman services.
The same is true of banks.
Private banks
are much more efficientin offering
the financial servicesthat we benefit from.
That's one thingthat we talk about.
Most of the innovations in moneyhave been really good points,
but it's a movement,the digital money movement,
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away from just using cash, goldand silver coins
to using things like checksand deposit transfers.
Probably 95% of the transactionsthat you and I engage
in on a daily basis
or transactionsthat were made possible
by innovations by private banks
using forms of moneythat are liabilities
now are issuedby those private things.
(10:37):
And so I worrysometimes that the idea of cbdcs
that we risk throwing the babyout with the bathwater.
Yes, this new
these new digital innovationsand payments are a great thing,
but I don't want to throw outthe private
banking sector with it,or at least reduce the scale
and scope of the privatebanking sector by having the Fed
get involved here,because that is more
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the risk of having retail CbdcsIf I can use a metaphor,
because I want to make sure
to wrap up this point about whatretail cbdc is.
The analogy I like to think ofwhenever people
talk about retail, central bank,digital currency, so offering
digital currency directlyfrom the Fed to you and me,
ordinary citizens is kind oflike the public option
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in health care for
a lot of people who want to haveuniversal financial
or universal health careat this instance
make the argumentthat we should just have
the government offera public option to Americans
and then we as individualscan choose between
using a private insurance planor getting our insurance
directly from the governmentfrom that public option.
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One of the problems
with the public option,at least potentially,
is that if the government
and its insuranceplan doesn't operate
by the same rules and the same competitive standards
that private insurancecompanies do,
then it could very easilydevolve
into a single payermonopoly health care system.
Because if the governmentpublic option is subsidized
by taxpayers, again, it's to beinsulated from the types of
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kind of competitive standards
that private insurershave to abide by.
Then there's a chance
they could monopolize the powerplay on a level playing field.
The same thing is truein this debate.
It cbdc becomeskind of like a public option
or opening a bank account.
But we don't force the Fedto operate by the same rules
and standardsthat private banks do when
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I'm worried that a lot of people
might take their moneyout of private banks,
put them in, deposit the Fed,
and that could be reallydisastrous for the economy
because private banks can do amuch better job of making well,
they have a profit motiveto make sure
that they don't issue
a whole bunch of bad
loans, that they're investingin small businesses
and new venturesthat have the best chance
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of promoting growth,the American economy.
I worry that we put that at riskif we introduce things
like a form of CBCand allow the Fed
to play on a separateplaying field, that's not fair.
Well, you mentioned cytokines,
and I know you've written aboutfat accounts in the past, and
my thought is alwayssort of like, well, that
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the government's postal service
doesn'tsound like such a great idea.
So I'm not sure that they'rebanking from the
the federal government is a great idea either. But
we also mentioned that there'sa wholesale potential here.
And so if you cut a little bit
elaborate, talked a little bitabout what
the wholesale alternativewould be, Again, these are parts
that might, you know,if we go forward, the CBD is CB
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digital dollars, but also different possible paths for us.
So a wholesalecentral bank, digital currency
basically just means the Fedwould offer a central bank
digital currencyonly to other banks and
payment providersrather than offering it
directly to you and me.
It would basically keepthe current relationship it has,
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which is only offeringthose accounts to banks.
And potentiallyand this is one thing
I would like to seeFinTech payment providers
and a new fintech company,whether it's Benmosche
Square,Cash, Apple Pay, PayPal, etc.
having them bethe ones who have the ability
to open up cbdc accounts that
(14:17):
this is my preferred approach.
What I've said,
the reasonI like this approach more
is because it actually doesa better job
of maintaining competitionwhile promoting innovation back.
It might even increaseboth competition and innovation
because if they do whatI just suggested,
which is the Fed, insteadof only allowing basically
big banks or formally charteredbanks, right now the Fed only
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allows banks to have accessat Federal Reserve.
There are some minor exceptions.
We won't get into that,but it's basically a bank
that I would like to see themexpand that access to these
companies that I just mentioned,
because I think those companiesare very well positioned to do
things that maybe currentlybig banks get economic.
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I think that those fintechcompanies
have a competitive advantage,for instance,
in offering services to peoplewho are currently excluded.
I don't have a bank account,
but I have a savingsaccount of any type.
Those people might be waryof opening up a bank account
at Chase or Jp morganor Wells Fargo,
but a lot of them have opened
ever in the United Statesas a cell phone.
(15:24):
But that doesn't even haveto be a sport phone necessarily.
But most Americanshave smartphones
and a lot of these fintechcompanies,
instead of trying to get peopleto go to the bank
and open account,they brought the bank to you
through apps like Venmo, ApplePay, PayPal, etc..
You nowdon't have to walk into a bank
to have basic financial servicesto open up a savings account.
(15:44):
And I would like to seewith this wholesale cbdc idea,
obviously thatthat expand its offering
so that it's not just banks
who have accessopening accounts of the Fed,
but alsosome of these companies as well.
So I think that has the
potentialto increase financial inclusion.
If I can use other metaphor,
just use the public optionto talk about retail Cbdcs see
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the analogy I like to think ofwhen it comes to wholesale Cbdc
would be somethinglike school choice.
So in the education system,most people agree that we want
everyone in the United Stateshave access to an education,
but there's different ways
that we can offerpeople in education.
One of them would be to have
basically say, okay, only the
government can provide schoolsto kids in America.
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We tend to not like havingjust one outcome.
And so another way of offeringeducation is, okay,
we're going to have basicallya public option in education.
We're going to havepublic schools
that are
directly providedby the government themselves
and runby the government itself.
But we're also going to haveprivate competition.
We're going to have privateschools, better
religious schools, better yet,charter schools and a whole
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bunch of kind of innovationsthat will have more choices.
I see that as being moreof this wholesale central bank
digital currency approach.
It's it's expandingthe options that people have,
not just using central bank,not just using private banks
to open up
accounts, but also having access
to lobbieswith fintech companies.
That'skind of my preferred approach
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because we as economists,we tend to say that more choices
and the more choicesthat you get consumers,
the more likely you're goingto see good competition,
good innovation companieshaving to compete
with each otherto offer better services.
I think that we havea better chance to do that.
Instead of the Fed
trying to directly get involvedin this game and potentially
reduce competition in privatesector,
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have it expand competition
in the private sectorby all through these multi-year
proposal servicesto more fintech companies.
So let'sget so now that we've talked
about what a digital dollarmight be, let's get into
some of the economic benefitsor possible costs of this.
And I think there's three areaswhere I touch on here.
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One is going to be what we call
negative nominal interest rates.
We'll have to explainthat a little bit.
And then there's this reservecurrency status
that especially with competition
between different nationsthat might go down this path.
And then we also havesome privacy concerns.
So let's first of all
talk about negativenominal interest rates,
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because this is something that
that is really sort of morein this area of monetary policy
and not not necessarilyany kind of interaction
with individuals in the bankingsystem or with using cash.
But it is something thatthat at least
some macro monetaryeconomists think might be
a beneficial thingfor from a policy standpoint.
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So if you could explain to us
first of what a negativenominal interest rate might be
and why that might be somethingwe could have possibly with a
digital dollar.
Right.
So when you and I havea positive comments at a bank,
we typically get paid intereston those deposit accounts.
Admittedly, it'snot very much interest
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that banks haven't paidmuch more than about,
I think, 5 to 1% interest overthe past 20 or 30 years or so.
But in theory,
one of the reasonswhy you put your money in a bank
and open up a deposit account isso that that money is not just
sitting idleunder your mattress,
not earning any interestwhat your money earn interest.
Well,
the idea of negative interestrate, something that
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a lot of macro economistshave been intrigued by, because
right nowmonetary policy suffers
from what we in economics callzero lower back.
In other words, whenever there'sespecially like a recession
going on,
typically during a recession,
the Fed wantsto print more money
in order to lower interest ratesand give people an incentive,
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take out loans that they want,start a new business or record
company, buya new house, buy new car.
Typically,that's kind of the mechanism
throughwhich monetary policy increases
spending by loweringinterest rates in the economy.
Problem is, interest ratescan only over zero because as of
right now,
that doesn't have the abilityto have negative interest rates.
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It can drive interest ratesas close to 0% as it can.
But if the Fed did try to chargeyou a negative interest rate
and if your bank tried to chargeyou a negative interest rate
on your deposit account,what would you do?
You would just cash out,you take your money out, there's
no interest.
So you'dmuch rather, in other words,
have cash in your mattress
than have deposits in a bankwhere every year
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there's a -1% interest rate,for instance,
you're losing1% of that deposit.
So that's what we meanby the zero lower back.
In theory, interest ratescan't fall below zero.
That can't driveinterest rates below zero,
because if they tried to,people would always cash out
and just put cash intoyour mattress.
Might be a disaster for
the account would be bankruns and panics.
There would be no more private
(20:37):
sector lending by private banksto private businesses.
You get a replay of what we sawduring the Great Depression
would be a terrible thing.
So a lot of economistshave kind of theoretically
taught around the idea of snag,okay, if we could just get rid
of the people, didn'thave the option of cash more
if they only had digitalforms of money, especially
something like the CDsthat we're talking about,
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If people have nowhere to run,then we could
actually charge themnegative interest rates
if we wanted to avoid the zero lower bound
and try to spur peopleto spend more and borrow more.
During the recession,
we could say, okay, insteadof having a 0% interest rate,
we're going to charge youa -2% or -3% interest
and keep lowering
and lowering ituntil people say, okay,
I'm not keeping my money inthe bank, I'm not going to say
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I'm gonna go outand spend more money
and thereby of supporting thisidea, stimulate the economy.
So that'sone of the big arguments
that you see in favor of Cbdcsand it's hopefully a way to help
get rid of cashand give monetary policy more
tools and effectivenessas we talk about soon,
I have some skepticismabout whether that's good
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for the economy in generaland definitely
whether it's good for consumers,
because I don't think consumers
want to have fewer choicesand have nowhere to run.
Well,
we don't we don'tneed to get into all the details
of monetary policy.
But I think one thing to knowthat is
there are many economistswho come back and say
they're not surethat the Federal Reserve
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makes things a lot betterby trying to that
in actually anticyclical policies are trying
to smooth out the economythrough its monetary policy.
And if you're doubtfulwhether the Federal Reserve
really should be doing a lotto try to stave off recessions
as opposed to keepingthe banking system healthy,
(22:25):
then there's not a lot of valuein letting the Fed
have an actual weaponhere in its arsenal.
Is that right?
But you bring upa very good point, which is that
a lot of economists
realize that the Fedis capable of making itself
so giving it more toolsand quickly, more ways
to make mistakes might notnecessarily be a good thing.
(22:47):
I always tell my colleagues,
make money in bankwhenever I teach macroeconomics.
There's two types of errorsthat policymakers would make,
both in terms of monetary policy
and alsoin terms of fiscal policy.
Whenever you're tryingto counteract the recession.
One them are what I wouldcall sense of commission.
When the Fed actively createsa boom bust cycle
by doing things like what
(23:07):
a lot of economistswould argue happened
in the early to mid 2000during the housing bubble.
A lot of macro economistssay in hindsight
the Fed was pretty much moneykeeping its rates to up.
So in other words, the Fed saidwas a set of commission.
At that timeit was actively contributing
to the boom bust cycleby printing too much money,
keeping interest ratesartificially low.
The second type of mistakethat central banks can make
(23:27):
and also that politicians
can make when it comes to fiscalpolicy is sins of omission,
which is basically not doingenough.
Whenever a crisis does hit.
So a good example of thiswould be the Great Depression.
Whenever we teachabout the Great Depression,
one of the thingsthat we typically say
is that the Federal Reserve,the central bank,
basically about the bottom fallout of the economy
(23:48):
and even thoughit had the ability
to whenever peoplewere pulling cash
out of the banking systemand running on the bank,
what the Fed should have done
is actedas a lender of last resort,
made sure the banks had enoughcash on hand
to alleviate people'sconcerns in the bank panic
and make sure that well-runbanks that were solvent,
that had not been making badloans
didn't go out of businesssimply because of liquidity.
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Those are sins of omission,and both of those are things
that basically bankswere capable of doing,
making mistakes,both of commission and omission.
And that's one of the reasonswhy once you realize
that central banks aren't
just always doingonly good things,
but they're also capableof making mistakes
that amplify the business cycle,
then it gives you a little bitmore of a humble view
(24:31):
of what central banks should do,
understanding the limitsof central banking policy
and a lot of economists
and I'm not sayingthis is a universal position,
but a lot of us who studymonetary
economics saythe best thing for the Fed to do
is keep it simple,
focus on the thingsthat it can't control,
have a simple guidelineto the follows
and try not to deviate from thattoo much or try to overcorrect
(24:52):
because a lot of timefrom the Fed tries
to play
too activea role in the economy,
it createsmore problems in its work.
I want to use another kind ofmedical real quick.
I like you with my studentsand that's the drive.
So one of the pieces of adviceyou probably give your kids
whenever they turn 16,they start to drive
is that if they ever do
kind of go off the roada little bit,
what's the worst thingthey can do?
Overcorrect, Tryto snap the steering wheel over
(25:14):
because then you run the riskof potentially flipping the car,
getting stuck in kind of a rut
with one of your tiresand basically
creating a much worseproblem for yourself.
Usually if you go off the roada little bit,
you want to try to stay calm,stay the course,
not go any further up the road,
but kind of graduallyget back on the track.
Right? That's truemonetary policy, too.
And I worry a lot of timeswith monetary policy
(25:35):
that we're too quickto overreact.
The Fed is amplifyingthe business cycle,
both for the sins of omissionand commission,
when in realitywhat we need is guardrails
that simplifiedthe Fed's stance.
Well, we only havea couple of minutes left here
is that I do want to get intosome of the privacy issues
that have been raisedbecause I free cash at one level
allows people to take make some anonymous purchases.
(25:59):
Yeah, you don'tyou can't go track cash flow off
and that has advantagesand disadvantages.
And so so tell me about
the potentialloss of privacy or anonymity
and whether that that could be an important consideration.
Yeah,I think this is one of the best
critiques of central bank
(26:19):
digital currency is that
even though central bankshave tried to say
that they're going to allowfor a certain degree of privacy,
ultimately this is openingan account
at the government's backat a central bank.
And there's a lot of reasonsto think
that governmentsare going to use that power.
They have more controlover people's accounts
than ever, the banking system,to kind of use as a backdoor
(26:40):
to basically impingeon people's financial freedom
and their privacy.
So it's certainlyone of my concerns.
It's a big concern
that even thoughyou've mentioned
a number of central banksthat talk about Cbdc,
none of them have foundan effective way
to earn the public's trust.
Yet there's been examplesof countries like Ecuador
that have already experimentedwith something
(27:00):
like Cbdc central bank directlyoffering digital accounts,
and it failedwithin three years, and Ecuador
lasted from 2015 to 2018
because of a lackof public trust,
because people value
their financial privacyand they didn't trust
that the government was goingto respect their privacy
or offer better servicesin the private banking sector.
So those are very valid concerns
(27:22):
and atsome level we can't avoid it.
The people have some privacy,then they will sometimes
some bad people or some peopleuse things that that vibrancy
to help fund thingsthat we don't like,
whether it be terrorism or buy
illegal drugsor child pornography.
And there's limited abilityto crack down on that
(27:43):
without also may ability toviolate privacy in other ways.
Right. Right.
I always say I worry about
throwing the baby outwith the bathwater.
It's true
that if you have moredigital payments
and thingslike cryptocurrencies,
then that will help Sometimespeople in the illicit market
and the underground economy
more easilyfacilitate transactions.
(28:03):
But that's 1% of transactions.
You don't want to hurt the 99%of people who would benefit
from these technologies
by making it harderfor them to transact.
And so that's somethingthat I definitely like to remind
peopleof, is don't throw the baby out
with the bathwater when it comesto these regulations.
Well,I think that's a good point.
A great point to finish with. Yes.
Well, thanks so much for comingon to talk about this with us.
(28:25):
And thank youall for joining us.
Join us again next timeon the nightly conversations.
This has been e
Conversations,a joint production
of Joy, Torture Divisionand the Manuel H.
Johnson Centerfor Political Economy at
Troy University University.
the opinions expressed on
this programrepresent the viewpoints
of individual authorsor contributors
and do not necessarily reflectthose of Troy University.
This is, in conversations,
a joint production of TroyTelevision and Emmanuel H.
Johnson Centerfor Political Economy.
(00:20):
Now here's your host, Dr.
Dan Sutter.
Helloand welcome to Conversations.
I'm your host, Dr.
Dan Sutter of the Johnson Center
for Political Economyat Troy University.
Money is indispensableas a medium of exchange.
And throughout its history,
the form of money has changedand evolved
as bankingand finance has moved online.
(00:43):
It only makes sense
that money will frequentlybe virtual as well.
The Federal Reserveand the US Treasury Department
are exploring the potentialfor a central bank,
digital currency,or a digital dollar
that could potentially replaceour current dollar.
Over 100 countriesin the European
Union are also exploringthe possibility
of a central bankdigital currency as well.
(01:04):
What would
be the economic benefitsand costs of
such a move or a digital dollar?
Joining me to talk about thison the show today is Dr.
Scott Burns, use a professorof economics at Southeastern
University, SoutheasternLouisiana University.
And I thinkI'm going to Louisiana.
(01:25):
He earned a bachelor's degreefrom LSU in Masters and Ph.D.
degrees from George MasonUniversity.
He's published over a dozen
journal articles
in outlets like the Journalof Institutional Economics,
the Journal of RegionalRegulatory
Economics, the Cato Journal
and the Journal of PrivateEnterprise.
Prior to teachingat southeastern Louisiana, Dr.
(01:46):
Burns taught at Troy University,
and he was partof the Johnson Center.
So welcomeback to the conversation, Scott.
Thank you.
And it's really goodto be back on.
Well, let's get started here.
And I mentioned that moneyis a medium of exchange.
This is a term
we certainly introducedto our students in economics.
But remind us briefly,what exactly does a medium
(02:08):
of exchange do for us?
Well,I think a good little thing
at the beginningof your description
is that money is a commonlyaccepted medium of exchange.
There's a whole bunch of things
that we could useas medium of exchange.
That just means things thatwe can use to facilitate trade.
You know, we can think aboutthings like barter transactions.
You and I can conductbarter transactions
(02:29):
where we're split, where we aretrading one good for another.
But that's extremely costlyto try to do that.
If you and Iare trying to engage in
barter transactionswhere you trade me your time
in exchange for my suit to bea very bad trade, by the way.
But nevertheless,
those are very difficulttransactions to conduct
because we have to find goods
that both you want and I haveand that I want that you have.
(02:52):
That's not always going to beeasy to do.
It's a lot easier to engagein trade with people
when there's a commonly acceptedmedium of exchange.
One good that we know that
everybody valuesfor the very good,
even if we don't want todirectly consume it ourselves.
We know that we can easilytrade it in exchange
for thingsthat we actually want.
This is a big reason whythen things like gold and silver
naturally emerged over time
(03:13):
as money, as commonly acceptedmediums of exchange.
Because even though you andI might not get over silver,
we might not use itto build our houses
or our toiletsor anything like that.
We know for a factthat if we trade
and receive gold and silverin exchange,
it's pretty easy to tradethat for the things we want.
And so that's the ideabehind money.
Money facilitates exchange.
(03:33):
The way that we placein economics,
money reduces transactions,and so it makes it easier,
in other words, for us to engagein transactions.
You get the thingsthat we ultimately want.
We mentioned gold and silver.
Those were thingsthat kind of naturally emerged
over time as moneybecause they were
they contained all the key
characteristics of peoplelook for money or portable,
they were divisible,
(03:54):
or you can break them into
smaller and larger
denominations that arefairly uniform and value, etc..
But as you're kind of alludingto, money
evolves a lot over time.
How much money that we usedoesn't come in a physical form
like that.
Gold and silver coinsthat we buy to use five
or ten years ago or even mightbe physical pieces of cash
that we use today
(04:14):
and that we've used a lot over
the past century in the USeconomy.
Now, I'd say the vastmajority of transactions
are not conductedusing paper currency or COIN
conducted digital.
So the question thatwe're really getting into today
with virtual bankdigital currency,
you're going to hear me say
Cbdc sometimes is kind ofan abbreviation for central bank
digital currency,but that's basically the Fed,
(04:36):
the Federal Reserve,the central bank, United States.
Their way
of trying to get into
this digital money marketand provide
their own form of digital money
rather than relying on privatebank software instead.
So let's talk about one thingthat you mentioned about money
going online.
People hear about Bitcoinand cryptocurrencies
and they might think, well,they wouldn't.
(04:57):
You thinkthink of a digital dollar?
Is that just another form
of bitcoin or a cryptocurrencyor what's the difference?
So there is a key distinction.
Central bank, digital currency
is dollardenominated and Bitcoin is not.
What I mean bythat is basically this,
even though they are bothpotentially digital
(05:18):
with something like Bitcoin.
Bitcoin is its ownkind of form of money.
It's not denominated in dollarsto a lot of people who transact
in bitcoin very quicklywill cash that out into dollars.
But you actually don'tdenominate anything.
You don't have to denominatebitcoin transactions in dollars.
It's kind of its own monetarystandard
(05:40):
that makes its own formof what we a monetary
economics might call a basicor outside form of money,
something that's not issuedby the banking system
that's treatedas an ultimate form of money.
Central bank digital currency
is ultimately nominated in U.S.
dollars.
It's not a separate formof outside money.
And one of the benefits the U.S.
(06:01):
government of that is
things like Bitcoin arekind of a threat to the U.S.,
not least potentiallyif a bunch of people
look using dollarsand started using Bitcoin,
then that would threatenthe US reserve currency status.
It will threaten
a lot of the kind of influencethat the Federal
Reserve has over not just the US
making system and money supply,but the global monetary system.
(06:23):
But central bank, digitalcurrency wouldn't do that.
It's still dollar denominated.
It's not a separateform of money.
It's just another paymentmechanism, basically.
And so that's one of the reasons
why the Fedis interested in this.
They see the competitioncoming from
not just Bitcoin, but all the
all the other cryptocurrenciesout there
and even other central bankstalking about experimenting
with cryptocurrencies,
(06:45):
central bank, digital currency,
and the Fed basically sayingwe want to be ahead of the game,
we want to stay aheadof the game
and potentially offerthese services ourselves
so that other countries,other central bank
and other private companiesand monetary issuers,
cryptocurrencies don't beat usto that digital marketplace.
And it's importantto remember that at this point
(07:06):
the Fed is only thinking aboutthe possibilities
with a central bank,digital currency,
nothing, certainlyany kind of concrete plan.
So as we talk aboutsome of these aspects with it,
nothing'swritten in stone in terms of
or even whether we're going
to go forward with a digitalcurrency where so
we're going to be talking aboutsome possibilities here.
(07:27):
These are not necessarilythe certainties
of what's going to happen right
at one levelwhere there's some distinction
about where
the path that digital currencyor digital dollars could go
forward is a distinctionbetween a retail central
bank, digital currency,and a wholesale central bank.
Digital currency.
(07:47):
So if you could explain for uswhat this
this difference would be.
Yeah, that'sa very important distinction.
A retail cbdc a retail centralbank, digital currency.
That means that a central bank
like Federal Reserveand our nation, United States,
would be offering these cbdcaccounts directly to the public.
Cutting out the middleman,a bank, in other words.
(08:09):
So what that basically means,if you have a retail CBD,
then in theoryyou could open an account
at the Federal Reserve
Central Bank, nine statesright now, you and I,
as private individuals,we can't do that.
The Federal Reserve is whatwe might call a bank, respect
the central bank, basically,meaning that it serves
as the bank for all the banksin the banking system.
(08:29):
Now, banks settle paymentsbetween them is where
the clearinghouse is located.
It's basically just a bankers.
But one of the ideas thatsome people put forward for Cbdc
is while we make the FederalReserve open not just to
banks in the United Statesbut to everybody,
some people call the centralbank role or banking role.
(08:50):
We talk about ideaslike gut accounts,
which is basically justthis idea of letting ordinary
individuals open up a savingsaccount, a checking account
at the Federal Reserve itself,cutting out the middleman
of usingprivate things themselves.
At first, this idea of
cbdc might seem like a good idea
way of streamlining
the banking systemby cutting out the middleman
(09:10):
of other banks.
Just letting people go.
This could
go to the Federal Reserveto open accounts,
but you and I have been teachingeconomics for quite some time.
And one of the things
that we teach a lot of our microone on one classes
is that middlemen are notnecessarily bad for the economy,
especiallybecause a lot of times
middlemen offer servicesin facilitate transactions
in ways that actually increaseeconomic efficiency.
(09:32):
Just to use an example,
Amazon doesn't really produceanything directly,
but Amazon is mostly a littleyou're facilitating transaction.
You're helping me connect toa shirt producer in Bangladesh.
I can get a shirt more easilyall by digitally,
and I wouldn'tbe able to do that much.
I'm not going to get on a planeand fly to Bangladesh to
price compare shirtsmade there versus gear, etc.
(09:55):
So you would agree that Amazonand eBay and companies like that
provide really efficientmiddleman services.
The same is true of banks.
Private banks
are much more efficientin offering
the financial servicesthat we benefit from.
That's one thingthat we talk about.
Most of the innovations in moneyhave been really good points,
but it's a movement,the digital money movement,
(10:16):
away from just using cash, goldand silver coins
to using things like checksand deposit transfers.
Probably 95% of the transactionsthat you and I engage
in on a daily basis
or transactionsthat were made possible
by innovations by private banks
using forms of moneythat are liabilities
now are issuedby those private things.
(10:37):
And so I worrysometimes that the idea of cbdcs
that we risk throwing the babyout with the bathwater.
Yes, this new
these new digital innovationsand payments are a great thing,
but I don't want to throw outthe private
banking sector with it,or at least reduce the scale
and scope of the privatebanking sector by having the Fed
get involved here,because that is more
(10:59):
the risk of having retail CbdcsIf I can use a metaphor,
because I want to make sure
to wrap up this point about whatretail cbdc is.
The analogy I like to think ofwhenever people
talk about retail, central bank,digital currency, so offering
digital currency directlyfrom the Fed to you and me,
ordinary citizens is kind oflike the public option
(11:20):
in health care for
a lot of people who want to haveuniversal financial
or universal health careat this instance
make the argumentthat we should just have
the government offera public option to Americans
and then we as individualscan choose between
using a private insurance planor getting our insurance
directly from the governmentfrom that public option.
(11:42):
One of the problems
with the public option,at least potentially,
is that if the government
and its insuranceplan doesn't operate
by the same rules and the same competitive standards
that private insurancecompanies do,
then it could very easilydevolve
into a single payermonopoly health care system.
Because if the governmentpublic option is subsidized
by taxpayers, again, it's to beinsulated from the types of
(12:08):
kind of competitive standards
that private insurershave to abide by.
Then there's a chance
they could monopolize the powerplay on a level playing field.
The same thing is truein this debate.
It cbdc becomeskind of like a public option
or opening a bank account.
But we don't force the Fedto operate by the same rules
and standardsthat private banks do when
(12:30):
I'm worried that a lot of people
might take their moneyout of private banks,
put them in, deposit the Fed,
and that could be reallydisastrous for the economy
because private banks can do amuch better job of making well,
they have a profit motiveto make sure
that they don't issue
a whole bunch of bad
loans, that they're investingin small businesses
and new venturesthat have the best chance
(12:50):
of promoting growth,the American economy.
I worry that we put that at riskif we introduce things
like a form of CBCand allow the Fed
to play on a separateplaying field, that's not fair.
Well, you mentioned cytokines,
and I know you've written aboutfat accounts in the past, and
my thought is alwayssort of like, well, that
(13:10):
the government's postal service
doesn'tsound like such a great idea.
So I'm not sure that they'rebanking from the
the federal government is a great idea either. But
we also mentioned that there'sa wholesale potential here.
And so if you cut a little bit
elaborate, talked a little bitabout what
the wholesale alternativewould be, Again, these are parts
that might, you know,if we go forward, the CBD is CB
(13:34):
digital dollars, but also different possible paths for us.
So a wholesalecentral bank, digital currency
basically just means the Fedwould offer a central bank
digital currencyonly to other banks and
payment providersrather than offering it
directly to you and me.
It would basically keepthe current relationship it has,
(13:55):
which is only offeringthose accounts to banks.
And potentiallyand this is one thing
I would like to seeFinTech payment providers
and a new fintech company,whether it's Benmosche
Square,Cash, Apple Pay, PayPal, etc.
having them bethe ones who have the ability
to open up cbdc accounts that
(14:17):
this is my preferred approach.
What I've said,
the reasonI like this approach more
is because it actually doesa better job
of maintaining competitionwhile promoting innovation back.
It might even increaseboth competition and innovation
because if they do whatI just suggested,
which is the Fed, insteadof only allowing basically
big banks or formally charteredbanks, right now the Fed only
(14:42):
allows banks to have accessat Federal Reserve.
There are some minor exceptions.
We won't get into that,but it's basically a bank
that I would like to see themexpand that access to these
companies that I just mentioned,
because I think those companiesare very well positioned to do
things that maybe currentlybig banks get economic.
(15:03):
I think that those fintechcompanies
have a competitive advantage,for instance,
in offering services to peoplewho are currently excluded.
I don't have a bank account,
but I have a savingsaccount of any type.
Those people might be waryof opening up a bank account
at Chase or Jp morganor Wells Fargo,
but a lot of them have opened
ever in the United Statesas a cell phone.
(15:24):
But that doesn't even haveto be a sport phone necessarily.
But most Americanshave smartphones
and a lot of these fintechcompanies,
instead of trying to get peopleto go to the bank
and open account,they brought the bank to you
through apps like Venmo, ApplePay, PayPal, etc..
You nowdon't have to walk into a bank
to have basic financial servicesto open up a savings account.
(15:44):
And I would like to seewith this wholesale cbdc idea,
obviously thatthat expand its offering
so that it's not just banks
who have accessopening accounts of the Fed,
but alsosome of these companies as well.
So I think that has the
potentialto increase financial inclusion.
If I can use other metaphor,
just use the public optionto talk about retail Cbdcs see
(16:04):
the analogy I like to think ofwhen it comes to wholesale Cbdc
would be somethinglike school choice.
So in the education system,most people agree that we want
everyone in the United Stateshave access to an education,
but there's different ways
that we can offerpeople in education.
One of them would be to have
basically say, okay, only the
government can provide schoolsto kids in America.
(16:26):
We tend to not like havingjust one outcome.
And so another way of offeringeducation is, okay,
we're going to have basicallya public option in education.
We're going to havepublic schools
that are
directly providedby the government themselves
and runby the government itself.
But we're also going to haveprivate competition.
We're going to have privateschools, better
religious schools, better yet,charter schools and a whole
(16:47):
bunch of kind of innovationsthat will have more choices.
I see that as being moreof this wholesale central bank
digital currency approach.
It's it's expandingthe options that people have,
not just using central bank,not just using private banks
to open up
accounts, but also having access
to lobbieswith fintech companies.
That'skind of my preferred approach
(17:08):
because we as economists,we tend to say that more choices
and the more choicesthat you get consumers,
the more likely you're goingto see good competition,
good innovation companieshaving to compete
with each otherto offer better services.
I think that we havea better chance to do that.
Instead of the Fed
trying to directly get involvedin this game and potentially
reduce competition in privatesector,
(17:29):
have it expand competition
in the private sectorby all through these multi-year
proposal servicesto more fintech companies.
So let'sget so now that we've talked
about what a digital dollarmight be, let's get into
some of the economic benefitsor possible costs of this.
And I think there's three areaswhere I touch on here.
(17:51):
One is going to be what we call
negative nominal interest rates.
We'll have to explainthat a little bit.
And then there's this reservecurrency status
that especially with competition
between different nationsthat might go down this path.
And then we also havesome privacy concerns.
So let's first of all
talk about negativenominal interest rates,
(18:12):
because this is something that
that is really sort of morein this area of monetary policy
and not not necessarilyany kind of interaction
with individuals in the bankingsystem or with using cash.
But it is something thatthat at least
some macro monetaryeconomists think might be
a beneficial thingfor from a policy standpoint.
(18:32):
So if you could explain to us
first of what a negativenominal interest rate might be
and why that might be somethingwe could have possibly with a
digital dollar.
Right.
So when you and I havea positive comments at a bank,
we typically get paid intereston those deposit accounts.
Admittedly, it'snot very much interest
(18:52):
that banks haven't paidmuch more than about,
I think, 5 to 1% interest overthe past 20 or 30 years or so.
But in theory,
one of the reasonswhy you put your money in a bank
and open up a deposit account isso that that money is not just
sitting idleunder your mattress,
not earning any interestwhat your money earn interest.
Well,
the idea of negative interestrate, something that
(19:12):
a lot of macro economistshave been intrigued by, because
right nowmonetary policy suffers
from what we in economics callzero lower back.
In other words, whenever there'sespecially like a recession
going on,
typically during a recession,
the Fed wantsto print more money
in order to lower interest ratesand give people an incentive,
(19:33):
take out loans that they want,start a new business or record
company, buya new house, buy new car.
Typically,that's kind of the mechanism
throughwhich monetary policy increases
spending by loweringinterest rates in the economy.
Problem is, interest ratescan only over zero because as of
right now,
that doesn't have the abilityto have negative interest rates.
(19:53):
It can drive interest ratesas close to 0% as it can.
But if the Fed did try to chargeyou a negative interest rate
and if your bank tried to chargeyou a negative interest rate
on your deposit account,what would you do?
You would just cash out,you take your money out, there's
no interest.
So you'dmuch rather, in other words,
have cash in your mattress
than have deposits in a bankwhere every year
(20:16):
there's a -1% interest rate,for instance,
you're losing1% of that deposit.
So that's what we meanby the zero lower back.
In theory, interest ratescan't fall below zero.
That can't driveinterest rates below zero,
because if they tried to,people would always cash out
and just put cash intoyour mattress.
Might be a disaster for
the account would be bankruns and panics.
There would be no more private
(20:37):
sector lending by private banksto private businesses.
You get a replay of what we sawduring the Great Depression
would be a terrible thing.
So a lot of economistshave kind of theoretically
taught around the idea of snag,okay, if we could just get rid
of the people, didn'thave the option of cash more
if they only had digitalforms of money, especially
something like the CDsthat we're talking about,
(21:00):
If people have nowhere to run,then we could
actually charge themnegative interest rates
if we wanted to avoid the zero lower bound
and try to spur peopleto spend more and borrow more.
During the recession,
we could say, okay, insteadof having a 0% interest rate,
we're going to charge youa -2% or -3% interest
and keep lowering
and lowering ituntil people say, okay,
I'm not keeping my money inthe bank, I'm not going to say
(21:22):
I'm gonna go outand spend more money
and thereby of supporting thisidea, stimulate the economy.
So that'sone of the big arguments
that you see in favor of Cbdcsand it's hopefully a way to help
get rid of cashand give monetary policy more
tools and effectivenessas we talk about soon,
I have some skepticismabout whether that's good
(21:45):
for the economy in generaland definitely
whether it's good for consumers,
because I don't think consumers
want to have fewer choicesand have nowhere to run.
Well,
we don't we don'tneed to get into all the details
of monetary policy.
But I think one thing to knowthat is
there are many economistswho come back and say
they're not surethat the Federal Reserve
(22:05):
makes things a lot betterby trying to that
in actually anticyclical policies are trying
to smooth out the economythrough its monetary policy.
And if you're doubtfulwhether the Federal Reserve
really should be doing a lotto try to stave off recessions
as opposed to keepingthe banking system healthy,
(22:25):
then there's not a lot of valuein letting the Fed
have an actual weaponhere in its arsenal.
Is that right?
But you bring upa very good point, which is that
a lot of economists
realize that the Fedis capable of making itself
so giving it more toolsand quickly, more ways
to make mistakes might notnecessarily be a good thing.
(22:47):
I always tell my colleagues,
make money in bankwhenever I teach macroeconomics.
There's two types of errorsthat policymakers would make,
both in terms of monetary policy
and alsoin terms of fiscal policy.
Whenever you're tryingto counteract the recession.
One them are what I wouldcall sense of commission.
When the Fed actively createsa boom bust cycle
by doing things like what
(23:07):
a lot of economistswould argue happened
in the early to mid 2000during the housing bubble.
A lot of macro economistssay in hindsight
the Fed was pretty much moneykeeping its rates to up.
So in other words, the Fed saidwas a set of commission.
At that timeit was actively contributing
to the boom bust cycleby printing too much money,
keeping interest ratesartificially low.
The second type of mistakethat central banks can make
(23:27):
and also that politicians
can make when it comes to fiscalpolicy is sins of omission,
which is basically not doingenough.
Whenever a crisis does hit.
So a good example of thiswould be the Great Depression.
Whenever we teachabout the Great Depression,
one of the thingsthat we typically say
is that the Federal Reserve,the central bank,
basically about the bottom fallout of the economy
(23:48):
and even thoughit had the ability
to whenever peoplewere pulling cash
out of the banking systemand running on the bank,
what the Fed should have done
is actedas a lender of last resort,
made sure the banks had enoughcash on hand
to alleviate people'sconcerns in the bank panic
and make sure that well-runbanks that were solvent,
that had not been making badloans
didn't go out of businesssimply because of liquidity.
(24:11):
Those are sins of omission,and both of those are things
that basically bankswere capable of doing,
making mistakes,both of commission and omission.
And that's one of the reasonswhy once you realize
that central banks aren't
just always doingonly good things,
but they're also capableof making mistakes
that amplify the business cycle,
then it gives you a little bitmore of a humble view
(24:31):
of what central banks should do,
understanding the limitsof central banking policy
and a lot of economists
and I'm not sayingthis is a universal position,
but a lot of us who studymonetary
economics saythe best thing for the Fed to do
is keep it simple,
focus on the thingsthat it can't control,
have a simple guidelineto the follows
and try not to deviate from thattoo much or try to overcorrect
(24:52):
because a lot of timefrom the Fed tries
to play
too activea role in the economy,
it createsmore problems in its work.
I want to use another kind ofmedical real quick.
I like you with my studentsand that's the drive.
So one of the pieces of adviceyou probably give your kids
whenever they turn 16,they start to drive
is that if they ever do
kind of go off the roada little bit,
what's the worst thingthey can do?
Overcorrect, Tryto snap the steering wheel over
(25:14):
because then you run the riskof potentially flipping the car,
getting stuck in kind of a rut
with one of your tiresand basically
creating a much worseproblem for yourself.
Usually if you go off the roada little bit,
you want to try to stay calm,stay the course,
not go any further up the road,
but kind of graduallyget back on the track.
Right? That's truemonetary policy, too.
And I worry a lot of timeswith monetary policy
(25:35):
that we're too quickto overreact.
The Fed is amplifyingthe business cycle,
both for the sins of omissionand commission,
when in realitywhat we need is guardrails
that simplifiedthe Fed's stance.
Well, we only havea couple of minutes left here
is that I do want to get intosome of the privacy issues
that have been raisedbecause I free cash at one level
allows people to take make some anonymous purchases.
(25:59):
Yeah, you don'tyou can't go track cash flow off
and that has advantagesand disadvantages.
And so so tell me about
the potentialloss of privacy or anonymity
and whether that that could be an important consideration.
Yeah,I think this is one of the best
critiques of central bank
(26:19):
digital currency is that
even though central bankshave tried to say
that they're going to allowfor a certain degree of privacy,
ultimately this is openingan account
at the government's backat a central bank.
And there's a lot of reasonsto think
that governmentsare going to use that power.
They have more controlover people's accounts
than ever, the banking system,to kind of use as a backdoor
(26:40):
to basically impingeon people's financial freedom
and their privacy.
So it's certainlyone of my concerns.
It's a big concern
that even thoughyou've mentioned
a number of central banksthat talk about Cbdc,
none of them have foundan effective way
to earn the public's trust.
Yet there's been examplesof countries like Ecuador
that have already experimentedwith something
(27:00):
like Cbdc central bank directlyoffering digital accounts,
and it failedwithin three years, and Ecuador
lasted from 2015 to 2018
because of a lackof public trust,
because people value
their financial privacyand they didn't trust
that the government was goingto respect their privacy
or offer better servicesin the private banking sector.
So those are very valid concerns
(27:22):
and atsome level we can't avoid it.
The people have some privacy,then they will sometimes
some bad people or some peopleuse things that that vibrancy
to help fund thingsthat we don't like,
whether it be terrorism or buy
illegal drugsor child pornography.
And there's limited abilityto crack down on that
(27:43):
without also may ability toviolate privacy in other ways.
Right. Right.
I always say I worry about
throwing the baby outwith the bathwater.
It's true
that if you have moredigital payments
and thingslike cryptocurrencies,
then that will help Sometimespeople in the illicit market
and the underground economy
more easilyfacilitate transactions.
(28:03):
But that's 1% of transactions.
You don't want to hurt the 99%of people who would benefit
from these technologies
by making it harderfor them to transact.
And so that's somethingthat I definitely like to remind
peopleof, is don't throw the baby out
with the bathwater when it comesto these regulations.
Well,I think that's a good point.
A great point to finish with. Yes.
Well, thanks so much for comingon to talk about this with us.
(28:25):
And thank youall for joining us.
Join us again next timeon the nightly conversations.
This has been e
Conversations,a joint production
of Joy, Torture Divisionand the Manuel H.
Johnson Centerfor Political Economy at
Troy University University.
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