Currency capers: What is going on with regulation of crypto?
Money was an amazing invention that drove productivity growth by facilitating exchange. Unlike the old barter systems, when everyone in a market is willing to use a common token with an agreed exchange value a person selling eggs and wanting to buy fish no longer needs to find a fish seller wanting to buy eggs.
The next big step up in productivity came from developing leverage – a trusted entity, let’s call it a bank, offers to hold your surplus cash for you. As long as they are sure that not everyone will want their deposits back at the same time, they can lend out some of this cash to others who can use it to invest in expanding their production. If the bank does its job well the borrower will be able to repay the loan with…
