Tyler Cowen: uncertainty

Transcript context

…I feel like I’m talking to a famous economist. [laughs] I’m on your territory now. It’s dangerous because I’m not an economist. Well, I haven’t figured this out myself either, to be clear. I’m genuinely asking various people. I asked Austan Goolsbee the same question because I don’t know. Yes, I believe that the last stat I saw, stablecoins hold 4 percent of treasury. If this grows a lot — it already is meaningful, but it will be meaningful. I think of it more in terms of payments and all the things . . . you can have payments and then all the adjacent things you can do around payments versus a bank account, and replacing folks like banks in the Federal Reserve that control the money supply. That’s at least where I think the focus should be. I believe in the current draft of the bill, you can’t offer yield to the consumers. I think that’s something the banks are fighting for. Anyways, this is still a political thing going on, but they don’t want that because they think if you can offer essentially a treasury bill, like a yield, and the consumer gets the yield, that that will become more attractive than bank accounts. I think this will also be a question: Is this optimized more around payments or more around savings use cases? I’ll have to defer to you. I would also argue the other national security interest here — and you’ve had others write about this in various editorials — it’s another way to popularize a dollar, right? We’ve seen the demand for it, and if we legitimate it, it presumably will make, hopefully, the dollar more popular and increase its status or maintain its status as a reserve currency. Fractional banking stuff, I probably have to defer to you on that, as I could speculate a little bit, but it’s from an amateur perspective.…

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