Switzerland votes today on whether or not to ditch fractional reserve banking. Citizens are being asked if they support the Vollgeld initiative, which would limit money creation to the Swiss central bank.
This is more than a step towards mitigating the threat of bank runs. It tantalizingly dangles the possibility of an entirely new economic model in front of a watching world
It’s worth noting that the central bank does not want this proposal to go through. This is a good sign, I suppose – as with royalty, better to have power thrust upon you, than to actively seek it.
Why is it against the plan? Because it would leave the central bank controlling the money supply, and that, it argues, was shown to be a bad strategy 20 years ago. Also, the central bank would rather not get involved in politics, thank you very much.
A further consideration is the impact it would have on Switzerland’s competitiveness. At a time when dependence on traditional banking services has left the economy fragile, the reduced lending and possibly reduced growth would further put it at risk.
An interesting twist is that the centralization of digital money that this implies – combined with the country’s bid to become a centre for cryptocurrency businesses – seems to further entrench the growing conviction that cryptocurrencies are not money, or at least, are not a threat to central bank money.
Staying with central banks, there was a flurry of blockchain-related announcements this past week that indicates progress on use-case research.
The South Africa Reserve Bank announced the completion of a 14-week trial that managed to settle the country’s approximately 70,000 daily payment transactions within two hours, while preserving anonymity.
The Bank of Thailand is looking into developing a central bank cryptocurrency for interbank settlement.
China’s central bank has finished work on a blockchain-based system that digitizes cheques, which are still a significant tool for domestic business finance.
On a more bearish (or realistic?) note, the Dutch central bank said that it’s blockchain trials indicate that the technology is promising, but not yet practical for payments.
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“Modernity is alienating, and it has been alienating for a great while; look at an Edward Hopper painting if you think this post-industrial misery has come about only since the Internet was invented.”
Andrew Solomon in The New Yorker, trying – like all of us this week – to make sense of the senseless.
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I gave a keynote talk at the OpenExpo 2018 event in Madrid on Wednesday, in which I talked about how blockchain development would go nowhere without open source platforms, and open source platforms are going to depend on blockchain development for growth.
In the talk, I referenced an article from the Financial Times a few weeks ago, that I’ll mention here because it’s so damn intriguing. The opposite of open-source has to be patents, and here are some interesting statistics:
- In 2017, 406 patents were filed that related to blockchain technology – that’s more than one a day on average.
- More than half originated in China (which presented more than double the number of US applications).
- The most prolific patent application presenter in 2017 was MasterCard. Hmm.
- In 2017, 607 patents were filed that related to cryptocurrencies. On average, that’s way over one a day.
- The most prolific cryptocurrency patent application presenters over the past five years were IBM, Gemalto and Intel.
On this last point, what do these three companies want with cryptocurrencies? IBM is a strong proponent of open source development – it was one of the original contributors to Hyperledger’s Fabric, and has led development on several Hyperledger tools. Intel is also a prolific Hyperledger contributor.
But those are blockchain platforms, not cryptocurrencies. Again, hmm.
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This is captivating: miniature gardens in trucks (via Colossal).
An exercise in design, botany and whimsy, this festival is an annual event sponsored by the Japan Federation of Landscape Contractors.
First of all, who thought of creating gardens in little trucks, more commonly used for construction work?
Second of all, that person deserves an award for creativity, because gardens in trucks should definitely be a thing. Mobile oases. Contained fantasy. Urban nature.
(Images via Colossal)