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Andy Mukherjee

SVB Collapse Shows Fickleness of Crypto Money

The world’s second-biggest stablecoin got thrown off its peg because of the demise of a bank relatively unknown outside Silicon Valley.

Fickle money.

Fickle money.

Photographer: Christopher Pike/Bloomberg

When the world’s second-largest stablecoin got caught up in the collapse of a California bank late last week, it reprised the now-famous maxim of Nobuhiro Kiyotaki and John Moore. “Evil,” the economists had claimed in a 2001 lecture, later made available as a paper of the same title, “is the root of all money.”

Turning a popular aphorism on its head was a ploy by the professors to enliven a technical discussion. “Evil is a strong word,” they wrote. “You may find the moral category too severe for something as mild as breaking a promise. In which case, you may want to change the title to ‘Distrust Is the Root of All Money.’ But that wouldn’t have quite the same ring.”