*The Economist* on digital money

This multi-article section from a few weeks ago was very good.  Here is one excerpt:

“It feels very significant that the countries which, apart from China, are most advanced, most active and most interested in cbdcs are the medium-sized emerging economies,” says Mr Landau. “They are too big to accept the loss of monetary autonomy, and sufficiently small to be exposed to the risk of foreign-currency competition.” They may feel they have no choice.

Here is another:

The rise of intangible capital may explain several capital-market trends, including the fact that private firms are tending to stay private for longer and the popularity of mergers. Software companies find it easier to protect intellectual property in private markets. Rigid accounting rules do not cope well with intangible capital, for instance by mostly booking spending on research as an expense, discouraging it.

The shift has other broad implications. Lenders like collateral: whenever financiers make loans they worry about being repaid, but they can take valuable property in case of default. Most consumer lending is secured against houses or cars.But businesses that create intangible assets do not have such collateral. This can make it harder to secure debt-financing, which is often not available unsecured for new businesses at a reasonable rate. Stephen Cecchetti, an economist at Brandeis University, calls this the “tyranny of collateral”.

In those settings, data can matter more than the ability to pin down collateral…


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