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Historical lessons on the real effects of unstable stablecoins Posted: Innovations in private money creation, such as stablecoins, can be economically useful because they improve efficiency in the payments system. However, if these currencies are not fully 'stable', uncertainty over their value may be a source of transactions friction that have real costs. The column discusses how the National Banking Act of 1864 in the US provides a natural experiment for evaluating the effects of stabilising the value of private money. The act introduced a new type of private money that was fully stable for the first time. Gaining access to the stable money generated growth in economic sectors that were sensitive to transaction costs.

Tech ownership of banks and the regulatory response Posted: Should tech firms be allowed to own banks? This question is part of a broader debate on whether non-financial companies can affiliate with banks. This column explores the merits of permitting tech firms to operate a licensed bank and outlines their state of play and regulatory environment in seven jurisdictions. It also proposes policy options to help mitigate their perceived risks, as some banking authorities look to tech firms to expand financial access and improve consumer outcomes.

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