Rethinking Currency: Finding a Better Way to Run an Economy
Cash and credit have serious drawbacks. Can technology solve the problems?
Money is just so problematic, even apart from its being the root of all evil. It can disappear suddenly: A 2-year-old boy in Utah just put $1,060 of cash through a shredder while his parents weren’t looking. It doesn’t earn its keep: Apple Inc.’s returns are being dragged down by the low yield on $244 billion in cash and marketable securities that it can’t figure out how to spend. And it can seriously malfunction, as it did in last decade’s global financial crisis.
The good news is that money is getting better. Advances in information technology are making possible new kinds of it, notably cryptocurrencies. Meanwhile, the financial crisis has spurred a search for more reliable grades of grease and oil to lubricate the global economic engine. “Computational advances coupled with extraordinary monetary policies have created the perfect petri dish for cryptos and other new forms of money to grow,” says Lawrence Goodman, president of the Center for Financial Stability Inc. in New York.