Evolving Money: Money Without Borders (Sponsored Content)

SPEAKER_1 (0:00)

Since you're a subscriber to this Bloomberg podcast, we thought you'd be interested in a new four-episode sponsored podcast called Evolving Money. Produced by Coinbase and Bloomberg Media Studios, it explores some of the monetary system's biggest changes over the centuries, and today's companies that are making big bets that cryptocurrency could be money's next evolution.

You can subscribe wherever you listen to your favorite podcasts. Here's a recent episode.

Paddy Hirsch (0:35)

Last year, I went to France on a climbing trip. Scaling mountains takes a toll, of course, but I was prepared for that. The unpleasant surprise was the experience of managing my money. There was so much friction involved in converting and spending my US dollars in another country away from home, well, frankly, I could have started a small fire at the top of the mountain.

To change dollars into euros, well, first you need to find a bank that's open. Once you've done that, you need to stand in line, pay a fee, and then try not to blanch when you see that usually highly unfavourable exchange rate. If you use your credit card in an ATM, which you can of course, you pay an ATM user fee, plus a foreign transaction fee, plus a service charge, depending on the card. And then there's that appalling exchange rate again. Of course, I could have exchanged dollars for euros before I left, but then I'd have to weather the risk of taking a huge amount of cash with me to the and keeping it on my person as I navigated a foreign country. So mostly I just paid for everything with my American credit card, which worked fine and felt friction-free, but just a glance at my statement showed it was anything but. Fees are bounded on both ends of my transactions. It's as if I'd been taken a toll road every time I threw down my plastic. That convenience came at a cost.

I don't begrudge paying someone who provides a service. But these days, when it can be so easy and inexpensive to travel across the globe, it's ridiculous that we're still paying fees like we did last century. Frankly, I think we can do better. And I'm not alone in that.

From Coinbase and Bloomberg Media Studios, this is Evolving Money, and I'm your host, Paddy Hirsch. On this podcast, we'll be taking a different look at cryptocurrency. It's been cast as a radical departure for the monetary system. But whatever wasn't radical at all, just the next logical evolution of how we pay for things and store long-term value. Along the way, we'll explore how money has changed over the centuries, look for lessons that might predict its next evolution.

Throughout history, financial markets have struggled with the issue of borders. Borders create friction, add cost, and cause headaches for anyone who wants to spend money across them. On top of that, various national currencies can be wildly unstable. So could a borderless global currency ease friction and enhance financial inclusion and stability around the world? Cryptocurrencies offer an intriguing possible solution to money's border problem. And a particular kind of cryptocurrency, called stablecoins, could become a powerful medium of exchange for international payments, and offer people around the world economic freedom. In a bit we'll be joined by Brian Armstrong, co-founder and CEO of Coinbase, as we ask could cryptocurrencies be the future of global money? First, I'll be joined by Jacob Goldstein, author of Money, the true story of a made-up thing.

The issue of borders has long been a perplexing one for our monetary system. And it's not even limited to international borders. In the not too distant past, it was a big issue within the borders of the United States.

Jacob Goldstein (3:52)

The 1830s, 1840s kind of was peak, wild amounts of money in the United States.

Paddy Hirsch (3:58)

This is Jacob Goldstein. How many kinds of money did America have back then?

Jacob Goldstein (4:03)

There were thousands of kinds of money.

Paddy Hirsch (4:06)

Like you're not indulging in hyperbole here.

Jacob Goldstein (4:08)

At one point in the 1800s in the United States, there were 8,370 different kinds of paper money in circulation in the United States of America.

Paddy Hirsch (4:21)

And why did America have 8,370 different kinds of money? Well, it was all about what else? Trust. In the early 1800s, Americans had become skeptical of the Bank of the United States, which was a financial monopoly, the country's only national bank. After President Andrew Jackson decided to kill that bank, the only chartered banks that existed did so at the state level. 8,370 different local banks with 8,370 different currencies, which made things complicated.

If you're traveling from, I don't know, California to Kentucky, and you've got a pocket load of Sacramento bank printed money and you're showing up to Kentucky and trying to spend it in a general store, how did that go down?