AEI Event: Will digital currencies and fintech shape the financial system of tomorrow?

Hosted by the American Enterprise Institute.

Event Summary

On January 28, AEI’s Paul H. Kupiec hosted an event delineating the roles and risks that stablecoins, central bank digital currencies, and other fintech developments might develop in our financial system. Panelists also discussed the actions financial regulators might take to manage financial markets.

Oonagh McDonald of Crito Capital outlined her reservations with the claim that stablecoins will improve upon the financial system. Current fintech developments already are sufficient to increase financial inclusion and efficiency in payments systems.

Charles Calomiris of Columbia University, however, foresees a useful role for stablecoins in the future economy. Stablecoins can develop a more safe, efficient, and rich payment system. For fintech developers, Dr. Calomiris urged that stablecoins should look less like bank deposits and more like perpetual preferred stock. However, large banks have much to lose if fintech companies expand their economic importance.

The Mises Institute’s Alex J. Pollock described the conflict between the government’s monopoly on currency and the issuance of private stablecoins. If a digital currency is tied to the dollar, one is merely creating a new payment system, not a new currency. Dr. Pollock is doubtful a currency not backed by an asset or cash flow can succeed.

— John Kearns

Event Description

Cryptocurrency, stablecoins, central bank digital currency (CBDC), and other fintech technologies are vying to change the way we borrow, lend, and pay one another. Pending financial regulation and potential CBDC issuance will shape the financial system’s evolution and shift the importance of central banks, banks, investment banks, cryptocurrencies, stablecoins, and related exchanges.

Will banks, mutual funds, and traditional broker-dealer exchange markets continue to be the systems we rely on to save, borrow, and make payments? Or will new nonbank fintech ventures and blockchain transactions displace them?

Join AEI as a panel of experts discusses the innovations, regulations, and other factors that will shape the future financial system and affect the broader economy.

Agenda

10:00 AM
Introduction:
Paul H. Kupiec, Senior Fellow, AEI

10:10 AM
Panel discussion

Panelists:
Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia University
Oonagh McDonald, Senior Adviser, Crito Capital
Alex J. Pollock, Senior Fellow, Mises Institute

Moderator:
Paul H. Kupiec, Senior Fellow, AEI

11:30 AM
Q&A

12:00 PM
Adjournment