Currency is more like “paper gold”, an asset with idiosyncratic uses that are almost unrelated to our financial system. Most currency is used for small transactions and tax evasion, areas in which T-bills are useless.
We can make any digital ledger adapt to Scott's definition of currency.
This was all in response to Fama:
If you are an old Modigliani–Miller person the way I am, you think that’s a neutral activity.
Who is right or wrong? I am both right. Right because I can independently liquify T-Bills if I have an open software port to that automated T bill market. I am wrong because I am too friggen lazy.
But the fintech pros are not nearly as lazy as I, and they have already deployed sufficient technology to liquifty the T bill market with short chain cash. I would no be surprised to hear that someone liquified the T bulls on the ethereum block chain already, in Defin. It will almost certainly be done on version 2.0 with proof of stake. In many hedge funds, T bills already are treated as digital cash within the fund.
Would a merchant accept T bills for payment? Sure would as their accountant would inspect the system and say, yea, this is reliable and puts the merchant funds right inside a money market.
The whole point of sandbox is to make Modigliani-Miller true for everything. I can liquify my home by assigning shares in an ethereum contract enforced block chain. I can make those shares trade as simply as a credit card transaction, and make the share contract legally enforceable.
Who else liquifies the one year T bill?
The Federal reserve, waddya know.
And the Fed has been targeting the one year since 1982, all the hoopls about dual mandate is fake hoopla. The Fed has one mandate, liquify the one year to keep government funded.
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