Understanding Crypto 3: Eswar Prasad: Bitcoin, Banking, and the Future of Money

<p>Welcome back to another episode of our series focusing on cryptocurrencies. In this episode, we dive into conceptual complexities surrounding cryptocurrencies and how this might affect the financial system in future. To help us unravel this nuanced subject is Professor Eswar Prasad, a senior professor of trade policy and Professor of Economics at Cornell University, and a senior fellow at Brookings Institution. He is also a research associate at the National Bureau of Economic Research and was a former head of the IMF China Division. Besides his wealth of experience regarding traditional economies, he is also an authority on cryptocurrencies, which he explains in detail in his book <em>The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance</em>. In today’s conversation, we discuss broad conceptual ideas surrounding money and finance, such as the basic functions of money, the difference between outside and inside money, the limitations on creating wealth, how cryptocurrencies work, how cryptocurrencies may disrupt financial systems, why cryptocurrencies need trust to work, the future of cryptocurrencies, and much more. Tune in today to get insider information on cryptocurrencies with our special guest, Professor Eswar Prasad.</p> <p> </p> <p><strong>Key Points From This Episode:</strong></p> <p> </p> <ul> <li>A brief outline of Professor Eswar Prasad’s professional background. <strong>[0:01:14]</strong></li> <li>Professor Prasad explains what the basic functions of money are. <strong>[0:01:59]</strong></li> <li>We learn if money is a commodity or a social contract. <strong>[0:02:33]</strong></li> <li>The problems associated with fiat currencies. <strong>[0:03:00]</strong></li> <li>What the concepts of inside and outside money are. <strong>[0:04:12]</strong></li> <li>Factors that constrain the creation of outside money. <strong>[0:05:34]</strong></li> <li>Whether mechanically constrained money is good for economies. <strong>[0:07:07]</strong></li> <li>Learn whether commercial bank