Stablecoins Can Have Bank Runs
Also Credit Suisse risk management, lawyer-on-creditor violence, more cell phone fines, Starbucks governance and astrology-based consumer lending.
Programming note: Money Stuff will be off next week, back on August 26.
One thing that I say frequently around here is that crypto keeps learning the lessons of traditional finance at high speed. This is fun to watch. For one thing, sometimes it re-learns those lessons through funny catastrophes. But also, it has a tendency to learn those lessons in very clear, simplified, schematic ways. Crypto is a nice teaching tool. If you want to understand, like, credit crises, you can examine the causes and processes of the 2008 global financial crisis, but those are messy and complicated. Or you can examine the causes and processes of the 2022 crypto financial crisis, which are relatively contained and straightforward and funny, and everyone involved was like tweeting and giving YouTube interviews in real time. Many of the intuitions from the crypto crisis are useful in understanding real crises, but the presentation is simplier, funnier and more public. “Crypto,” I once wrote, “is what you get when you take the smart ambitious interns at traditional financial firms and put them in charge of their own play market.” That makes it educational.