Law, Power, and Justice

Today, bitcoin does seem to work as a currency for some international transactions, particularly in developing countries. That could be good, but it’s hard to tell which transactions are wealth preservation, which ones are tax evasion and which ones are capital flight. If I were a betting man I’d buy bitcoin, and you’re welcome to it. But I’m not a betting man, I’m an American academic who worries about deflation, and all I want is for bitcoin to stay the hell away from the dollar. That’s an argument, but I don’t think it’s a trade.

Similarly, I think the new US stablecoin law returns us to a 19th-century regulatory regime for dollars, where there’s no national deposit insurance and states race to the bottom with their regulations to attract business. How do I trade on my sense of doom? I can tell you about 1837, when paper bank notes failed, or 1932, when bank deposits failed. But I can’t tell you what year it is now. Is it 1825, in an expanding economy with room to run, or is it 1836?