The wonderful people at the Journal of Payment Strategy and Systems, which is my favourite journal in the entire world, have kindly allowed me to post a PDF of my newest paper. It is called “Clouds, Chips and Chains” and it discusses in some detail the evolution of digital cash and the options for implementing digital cash as a central bank digital currency (CBDC). Please do download it, subscribe to this wonderful journal and send me your feedback CBDC good or bad: it’s an area I want to learn more about.
The Economist covered Bitcoin reaching $50,000 with a story that touched on the digital euro. They noted that such a Euro-CBDC might bolster the international role of the euro (only a third as much is held in international reserves as the dollar, which dominates) and that such a system would be faster, cheaper and safer than sending euro payments through the current network of “correspondent” banks. They were kind enough to quote me on one interesting area of potential differentiation:
Its main draw may be to offer a level of privacy that neither America nor China can promise, says Dave Birch, a fintech expert.
America uses its financial system to enforce sanctions, China seeks control: but a European alternative that balanced the legitimate requirements of law enforcement and European principles of privacy (think GDPR for money) might be a globally desirable option. As I explained to the journalist, one way forward might be to use digital identity and pseudonymous wallets, with regulated financial institutions providing the links.
The Futurism Forum kindly invited me along to talk about the practical implementation of a central bank digital currency (CBDC) so I used my “evolutionary tree” to explain the development of electronic cash technologies and to suggest ways to use these technologies to build a CBDC. This presentation is now on YouTube so please do have a coffee, follow the link below and then give me your feedback good or bad.
As I mention in this presentation, I am very much in favour of implementing CBDC as a special case of a more generalised digital asset trading infrastructure and I am naturally curious to hear other informed perspectives.
The journalist Wendy Grossman reviews six books for your 2020 holiday season and kindly says of The Currency Cold War:
“If you believe, as Birch does, that these upheavals are inevitable, then it’s logical to consider how to manage the change. He proposes that the US and UK should develop a global digital identity infrastructure; create a global e-money licence; provide a digital diligence system that is alternative to and less exclusionary than the KYC regimes operating now; and create new payment systems that work with all of these. As he says in the book, and has repeated at numerous events since its release, government-backed digital currencies are not his idea, it’s coming from ‘serious’ people like Mark Carney, the former governor of the Bank of England.
P.S. Her reviews are very good. I’ve already ordered one of the other books from the list!
In a recent episode of Professor Scott Galloway’s podcast, he talked with one of my favourite writers: the eminent historian and Hoover Institution senior fellow Niall Ferguson. The subject of the conversation was the relationship between the United States and China. Their fascinating and informative discussion ranged across many fields, including financial services and fintech. Ferguson touched on a particular aspect of “Cold War 2” in this context, saying that American regulators “have allowed the fintech revolution to happen everywhere else” going on to say that “China has established an important lead in, for example, payments”, clearly referring to the dominance of mobile payments in China and the role of (in particular) Alipay in bringing financial services. He made this comment around the same time that the Chinese government pulled the plug on the Alipay IPO, what would have been the biggest IPO in history.
One of Ferguson’s central points is that the US depends to a greater extent than people realise on the US dollar being the international reserve currency. As he says in the podcast, the US has “an almost unlimited capability” to borrow in its own currency because the dollar is so dominant nand that “we are going to have a period of challenges to the US dollar of various forms and tenacious defence of its dominance by a US government that understands its existential importance to the United States”.
If you want to understand some of the big picture around the coronavirus, currency and what Ferguson referred to as “Cold War 2”, but what I call “The Currency Cold War” in this book, then you might want listen to this podcast from CoinDesk. It is a wide ranging conversation between Ferguson and CoinDesk’s Michael Casey about our disrupted world, inevitable crisis and what it could mean for money. As the author of one of the best books on the history of finance, The Ascent of Money, Ferguson has a very wide and well-informed perspective on the issues and, indeed I quote him more than once in my book!
I was very flatted and, frankly, honoured to see The Currency Cold War selected in the top 10 of the best books about cryptography by a panel comprising the noted venture capitalist Marc Andreessen, Professor of Applied Cryptography Nadim Kobeissi, Associate Professor of Economics Stephen Kinsella and Researcher Jerry Gamblin.
To be listed at no.7 amongst these brilliant books is more than I could have hoped for a year ago when I sat down to start work on what turned out to be the most timely of my books so far! A big thank you to everyone at the London Publishing Partnership for making this happen.
I am beyond excited to announce that the audiobook version of The Currency Cold War is now available on Audible and other platforms. It is expertly narrated by James Barlow, a professional voice artist who made a great job of interpreting my words for a general audience. Enjoy!
with kind permission of Helen Holmes (Instagram @TheOfficeMuse).
I wrote this article about China and digital currency for Forbes. Once it blew past 100,000 unique page views and was still being posted around on social media, I realised that the article must have touched a nerve somewhere! But the question is, what made the article so popular? Was it my brilliant analysis of the issues and the need for co-ordination between government and private sector, or was it Helen Holmes even more brilliant cartoon that precedes it!
The website Biblio-Fiend have listed their nine best books about the future of money and I cannot help but be a little flattered to find out that not only am I the author of two of the books on the list, this book is listed first! Here’s the full list:
The Currency Cold War.
Blockchain Bubble or Revolution by N. Mehta, A. Agasha & P. Detroja (Paravane: 2019).
The Future of Finance by H. Arslanian & F. Fischer (Palgrave Macmillian: 2019).
Beyond Blockchain by E. Townsend (2018).
Before Babylon, Beyond Bitcoin by D. Birch (LPP: 2017).
The Internet of Money volumes 1-3 by A. Antonopoulos (CreateSpace: 2016).
Personal Currency by R. Colbourn & A. Riegelmann (Lionhead: 2016).
The Age of Cryptocurrency by M. Casey and P. Vigna (Macmillan:2015).
How Would You Like To Pay by B. Maurer (Duke University Press: 2015).
Needless to say, I was very flattered to be in such good company!
In the MIT Technology Review “10 Breakthrough Technologies for 2020”, digital money is correctly identified as one of the most important technologies of the year. It really is, and not only for financial reasons. Their article says that
The rise of digital currency has massive ramifications for financial privacy.
Indeed it does but, as I suggest in the book, we can make design choices about how digital money works to “set the dial” on privacy. So I think that the privacy issues can be managed. But what really caught my eye in the MIT piece was the closing statement that the “digital money wars have begun”.
This may seem hyberolic, but it really isn’t, which is why I wrote this book.
As to who might win these wars, well, who knows. The truth is that after writing this book I don’t know any more than anyone else knows. I can say that I doubt that Libra is the future of digital money (many observers noted that Mark Zuckererg’s Vision for 2030 that was published on Facebook in January 2020, did not mention Libra at all) but it has certainly been a catalyst for thinking about the future of digital money. What I am more certain about is that there are some people who take the notion of this coming digital money war seriously, have a strategy for the battles to come and a long-term plan to win it.