Should the Federal Reserve Create a Digital Currency?

By |2022-02-09T21:01:01+00:00February 9th, 2022|Cryptocurrency, Governments, Payments|

In January 2022, the U.S. Federal Reserve released a long-awaited discussion paper on its thinking about a central bank digital currency, or CBDC.  The paper builds on prior work by the Bank of International Settlements (BIS). At the end, it provided a list of questions for public comment. I thought it might be helpful to [...]

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Payments 101, Part 8 – Enterprise Payments

By |2021-09-07T21:10:32+00:00September 7th, 2021|Enterprise Payments, Payments, Payments 101|

With this installment, we come to the end of our tour of major payments systems with a description of enterprise payments, which brings them all together.  You can read the earlier installments here. I hope it has been clear throughout these essays that all payment systems share a common structure, which I call the Five [...]

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A Realistic Path for NFTs

By |2021-06-15T15:55:33+00:00June 15th, 2021|Cryptocurrency, Digital Goods, NFT, Payments|

There has been a lot of hype around non-fungible tokens (NFTs) lately, and a lot of confusion, so I thought I had better address it.  As it happens, I am involved in my spare time with electronic music production, and that is where a lot of interesting discussions are happening.  I’m going to outline the [...]

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Payments 101, Part 7 – Checks

By |2021-04-06T22:15:00+00:00April 6th, 2021|ACH, Checks, Legal issues, Payments, Payments 101|

This is part of an ongoing series.  For previous installments, go here. Before we wrap up our tour, there is one more payment method we have to cover, which is the check.  The oldest non-cash payment method, it is also the only one that is on the decline, although its death is protracted and uncertain.  [...]

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Payments 101, Part 6 – ACH, Wires and Faster Payments

By |2021-03-01T19:30:28+00:00February 26th, 2021|ACH, Payments, Payments 101, Wires|

We are nearing the end of our initial excursion into the basic payment methods with what are the most fundamental ones, albeit the least familiar to the average person.  ACH and wires are the plumbing behind all the other payment types, as well as their own products.  Faster Payments systems are just a refinement, with [...]

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Stablecoins for Purchases? Not So Much

By |2021-01-28T17:15:16+00:00January 28th, 2021|Cryptocurrency|

I have said quite a lot in the past couple of months about how Bitcoin is not the best cryptocurrency for actual purchases, mainly because of its volatility.  Instead, I recommended using an asset-backed stablecoin, such as Circle’s USDCoin, to avoid market risk.  I have also criticized the most popular stablecoin, Tether, for failing [...]

Cryptocurrency in China’s Economic Strategy

By |2021-01-11T20:47:55+00:00January 11th, 2021|Cryptocurrency, Governments, International, Payments|

Recently, China piloted a new state-owned cryptocurrency, the digital yuan.  In this article, I will show how this fits into China's larger economic strategy, and why it is a harbinger of problems for the West and the mainstream payment networks. On November 24, 2020, the New York Times published an article, “China Says It Remains [...]

Payments 101, Part 4 – Debit Cards

By |2020-12-23T18:11:16+00:00December 23rd, 2020|Debit cards, Legal issues, Payments, Payments 101|

This is part of an ongoing series.  For earlier installments, see The Five Actor Model, Credit Cards, Part One, and Credit Cards, Part Two. In this article, we will dive into debit cards: what they are, how they work, the two different models, and legal issues. Here is the version of the Five-Actor Model I [...]

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Bitcoin is Not a Viable Currency. Stablecoins Will Be.

By |2021-01-19T18:30:44+00:00December 14th, 2020|Cryptocurrency, Payments|

(Note: this article was updated on January 19, 2021 to account for new information, particularly the extension of the boom in Bitcoin valuation since the original publication on December 14, 2020. These changes reinforce the points made in the original) Bitcoin has been on a roll lately, hitting a record high of $40,258.92 on January [...]

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