T:WTF 006 – Peter Munnings on the Blockchain, Central Banking, & Fiat Currency

Will a Central Bank Blockchain change they way money works? And how disruptive will it be?

It’s an important question given the truth that most people do not understand money. They cannot answer the simple questions like; What is money and where does it come from?  Perhaps this is best summed up by Henry Ford;

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.


Satoshi Created Bitcoin to solve the money problem.

Satoshi created the Bitcoin token and blockchain in direct response to the 2008 financial collapse. The design of Bitcoin is to solve the money problem.

To put this into some perspective, think of money as collateralised debt. Commercial banks have the power to originate or create money. We call is the fractional reserve framework. This means that you are not borrowing someone else’s saving. Rather the bank is creating money out of nothing based on a reserve percentage.

Positive Money breaks down of how banks create money and what the issue with debt is.

Central Banks and Blockchain!

The Central bank does not originate money in the form of commercial debt. The central bank does print real money in the form of cash. What you carry around in your wallet. They are also responsible for the countries Fiat Currency.

But what happens if Central Banks started putting their fiat currencies onto the blockchain? This has the power and potential to change everything.

In this What’s The Future podcast, we chat to Consensys’s Peter Munnings. Peter is building some amazing blockchain technology within the banking space.

We dig into this subject and it opens up some very interesting possibilities. Here is some stuff that you will get of this podcast:

  • Peter goes into a bit of background into the growth of Consensus, the work they are doing.
  • What happens when you issue a countries currency onto the Blockchain. What are the implication and the compliance frameworks that it needs?
  • Peter breaks down wholesale banking. This looks at inter-banking payment facility through Central Banks. The idea is to increase resilience and reduce costs. This leads to the cross-border payments cross borders.
  • Of course, we spoke about how a Central Bank’s Blockchain can solve SASSA and Fees Must Fall. The big issue is the last mile and giving people access to their money. A lot of work is being done in this area and its a matter of time.
  • What is the implication of full reserve banking? This is a move away from a fractional reserve banking system. The implication is huge. And it is now possible with Blockchain technology. This will stabilise the boom-bust cycle that we currently experience. What happens when we turn money from a Liability to an Asset.
  • And what happens when we have one ledger system rather than multiple ledgers. Every intermediary in the banking chain has their own ledger. A Central Bak Blockchain can streamline this into one ledger.

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Michael Cowen

Michael Cowen

Michael Cowen is the CEO of WTF and co-host on the ThinkWTF Podcast. I focus on helping business build systems where their people thrive. You can book my keynotes on WTF Keynotes

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