I’ve recently been doing a bunch of research into international payments, stablecoins, and the role of the US dollar in the world today. What surprised me when reading the online discourse (the comments section) was how often people seemed to be talking past each other about technologies and systems, mainly because they had a different answer to the question: how much should the government control currency[1]?

I like to think of everyone’s view here as sitting on a sliding scale. The thought experiment is, let’s say you were running a government and its currency and could redefine the rules as you see fit, and had the technology and manpower to enforce them accordingly. When would you step in and prevent me, a citizen of your country, from doing something with your currency?

  1. I pay a known enemy of state to fund a terrorist attack on citizens of your country.
  2. I buy illegal drugs from a known enemy of state and intend to distribute them in your country.
  3. I pay a foreign company to publish misinformation about your government.
  4. I buy a stolen car from a local thief.
  5. I buy illegal drugs from a friend for personal use.
  6. I invest in a foreign company that dislikes your government.
  7. I buy a ticket to a comedy show that makes fun of your government.
  8. I buy bread from a local baker who attends comedy shows that make fun of your government.

Most reasonable people would agree that 1 clearly requires intervention, and that 8 is too much government control. But other than that political and moral views can put people anywhere on this sliding scale. If I had to put the US government (and US Dollar) on this (totally made up) scale today, I would put it somewhere between a 3–5 depending on the political climate of the moment.

So much of the debate about payments, currency, and financial regulation occurs because people are operating from completely different places on this spectrum of total oversight vs total freedom. The technology and platform and protocol used is secondary, and often downstream of this. For example, in the US, a central bank digital currency (everyone having a bank account at the Fed) is almost certainly “technically” possible, but would be seen politically as “too much government control”.

Currencies are a powerful tool for nations, and therefore powerful weapons. Because of this, all governments implement some level of control over currencies, which shapes the underlying implementation and has tradeoffs just like any other technology: oversight vs privacy, centralization vs decentralization, automation vs manual controls. As builders in this space, we must design for the people we serve and the context they live in—their real spot on the sliding scale, rather than some whiteboarded ideal detached from reality.

But next time you read a post by a thought leader in fintech, crypto, or banking, or are at a dinner party where someone talks about the broken financial system—try and guess where on this scale their perspective lives. It might just make the content a bit more informative or fun.

1. To simplify, let’s define “currency” as “government issued” currencies and their derivatives (like a dollar denominated stablecoin), and let’s define “control” as controls on what you can spend that currency on. There’s many other types of controls, but since currencies are a medium of exchanging value, the most powerful means of control is controlling what value can be exchanged using that currency. There’s also other types of non-government currencies (ex. Bitcoin), but those are much less frequently used by the average person or business and usually subject to the same controls (or are explicitly used to get around them illegally) so let’s ignore those for now.