Cryptocurrency and the Value of Stable Coins (w/ Raoul Pal & Dan Morehead)
DAN MOREHEAD: There's a lot of people even get religious about money, because money is one of the only other faith based systems on earth. There's nothing intrinsic behind the US dollar, it's just a piece of paper. People get super fired up, the dollar is great, and we don't need another currency and all that. They forget there's 200 currencies on earth already, like, why not have 201? Bitcoin's just one more currency. There's already 200. The US dollars one of the least bad paper currencies out there, but 6 billion people live in countries with terrible currencies. Bitcoin or Eth or Ripple or whatever, if they switch their entire economy to Bitcoin, it'd be way better. That's why people should just keep it all in perspective, there's already 200 currencies. This is just like 201 through 210. RAOUL PAL: Just want to ask you one question, because I don't really understand it. What is the value of stable coins apart from transaction across platforms? Why the focus on these stable coins right now because they're basically US dollars, but in digital format? DAN MOREHEAD: There are a couple advantages, all tokens, including stable coins have these two principal advantages, they're borderless. Venmo is great, but I can't Venmo somebody from here to Indonesia, but I can send Bitcoin to somebody no matter what country they're in. That's awesome. They're essentially real time or instantaneous. Even the United States, which is one of the most sophisticated countries on earth, it takes three hours to send a Fedwire. If the most sophisticated bank on earth wants to send money across Wall Street to another very sophisticated bank, it takes three hours, whereas with a phone, you can scan Bitcoin in one second, and it'll be there. Those are the two principal advantages that will help even a dollar-backed stable coin or any national currency back stable coin, just much faster, much quicker, and it's borderless. If you had one that was in global use for commerce, it'd just be a lot easier, like a global Venmo, you'd be able to get on a bus. RAOUL PAL: That's what Libra is, if they get off the ground. DAN MOREHEAD: Yeah, that's the goal essentially and that's what the Chinese version of this is, is to try and make a digitally native currency that is easy to transact instantaneous, essentially free. It cost 35 bucks to do international wire. Like think about that, like if I wanted to send money to you, it would cost $35 back in the old days before the ban on international travel, it'd be quicker for me to go to the airport with a brick of cash and fly to the Caymans than it would be to wire it to you because it takes a couple of days. Even stable coins have huge advantages over our existing system. RAOUL PAL: I hadn't thought of it that way, but yeah, it's ridiculous. It's ridiculous that physically, you can move the cash faster than the system can actually process it. DAN MOREHEAD: Yeah, yeah. It really is, and the first time Roger Ver actually showed me how to use Bitcoin and he scanned it on my phone, and it popped up literally one second later, I was like, oh, wow, this is going to be big. It's way better than flying to the Cayman with a suitcase of cash. Although, should you extend an invitation, I would be much more than pleased to come join you down there. RAOUL PAL: You can bring a suitcase of cash as well, it's fine. Look, Dan, thank you very much for your time. I think it was really interesting to hear your perspective.