Thread by @_jillruth

I'm at a conference called #DebtCon3 today talking about the implications of state-issued tokens and how sovereign states might use cryptocurrency.

Yes you read that right... #DebtCon.

Also the game theoretics and credible commitment problems and incentive designs and reputation systems that are taken for granted in the world of sovereign debt have SO MUCH to teach the world of cryptocurrency where every individual / entity is basically a sovereign actor.

We've also got @Kiffmeister here talking about CBDCs (digital representations of fiat currencies).

He's talking about the Marshall Islands, whose SOV is NOT a CBDC but rather a sovereign digital currency... the Marshall Islands are attempting to use this ICO as a way of balancing their books.

"This Israeli company came along and said 'Have we got a deal for you...'"

"There's ~50 countries in the world looking at digital versions of their fiat currency... many of them very seriously. Not all are blockchain-based. Some, like Uruguay, are using a very simple account-based system. Anonymity is guaranteed by access controls based on court order."

"If there's any doubts about the health of the banking system, why not use a CBDC? Cash is expensive to produce and manage. And there is optionality that comes with CBDC like negative interest rates... which gets _some_ central bankers excited."

Shout out to @danrobinson who first pointed this out to me like a year and a half ago

cc @prestonjbyrne & @udiWertheimer and others who I know have followed the Marshall Trainwreck

One of the academics on the panel is now asking @Kiffmeister about how to monetary policy can be managed and yield curve interventions can happen with a mined cryptocurrency 🤯 never thought I'd see this conversation happening...

John replying that it basically depends.

There are so many directions you could go with this. Dai's governance comes to mind. As do conversation's around Ethereum's inflation rate and Bitcoin's long-term supply schedule. But I suspect this is not the intent of the question.

We've moved on from CBDC but the rep from the Council of Europe Development Bank just compared central bank easing to a morphine drip...