Hi Michael, just for our own curiosity, what are the weaker claims in this article, from your view?
We know that there is a limit to the amount of US T-bills that can be efficiently held in the market. If Glo reaches trillions of dollars of market cap, we’re most likely operating in a world where we issue multiple stablecoins in different currencies. Each reserve would then be backed by government bonds denominated in each stablecoin’s currency.
Our estimates of yield are based on T-bill yield, but, ofc, what assets will yield (or even exist) in the future where we’re planetary scale is hard to speculate about. We think that somewhere in the 2.5%-3% range for cash equivalent investments is a good baseline estimate. Does that seem reasonable to you?
Hi Michael, just for our own curiosity, what are the weaker claims in this article, from your view?
I meant that if you want to get Glo to, say, $1 billion market cap, then it doesn’t run into problems with the supply of T-bills, and I have no comment on whether it’s viable. But I disagree with your claim that Glo could eradicate world poverty, even at the most extreme upside.
So, speaking for myself and not for Global Income Coin, I think that there are many ways to challenge the link between cash transfers and ‘eradication’ of poverty. You might argue that
spillovers are inevitable at essentially anything short of planetary scale, and prelim evidence suggests they’re harmful;
Some evidence from Uganda suggests that there’s no meaningful difference 9 years later between recipients and non-recipients;
and probably many others. Does one of these motivate your skepticism? Or something else? This is purely for our edification, though we’re happy to discuss if you’d like.
FWIW, extreme poverty is generally declining over time, and our best-case scenario is to speed that up. But either way, something like 2⁄3 of all people are living on less than $10 a day—so not conventionally defined as extremely poor, but still people for whom $1/day could make a real difference.
The thing that motivates my skepticism is what I said in my first comment: I don’t think you can buy $11T of T-bills at anywhere close to current interest rates.
👋 This comes up often enough that I added a footnote (no. 5) to address it; repasting it here
If Glo reaches trillions of dollars of market cap, we’re most likely operating in a world where we issue multiple stablecoins in different currencies. Each reserve would then be backed by government bonds denominated in each stablecoin’s currency.
So our truly long-term vision doesn’t depend fully on T-bills, though what yield we get in such a scenario is hard to predict. Thanks for prompting us to communicate more clearly about this
Hi Michael, just for our own curiosity, what are the weaker claims in this article, from your view?
We know that there is a limit to the amount of US T-bills that can be efficiently held in the market. If Glo reaches trillions of dollars of market cap, we’re most likely operating in a world where we issue multiple stablecoins in different currencies. Each reserve would then be backed by government bonds denominated in each stablecoin’s currency.
Our estimates of yield are based on T-bill yield, but, ofc, what assets will yield (or even exist) in the future where we’re planetary scale is hard to speculate about. We think that somewhere in the 2.5%-3% range for cash equivalent investments is a good baseline estimate. Does that seem reasonable to you?
I meant that if you want to get Glo to, say, $1 billion market cap, then it doesn’t run into problems with the supply of T-bills, and I have no comment on whether it’s viable. But I disagree with your claim that Glo could eradicate world poverty, even at the most extreme upside.
So, speaking for myself and not for Global Income Coin, I think that there are many ways to challenge the link between cash transfers and ‘eradication’ of poverty. You might argue that
cash doesn’t address the behavioral components of enduring poverty;
spillovers are inevitable at essentially anything short of planetary scale, and prelim evidence suggests they’re harmful;
Some evidence from Uganda suggests that there’s no meaningful difference 9 years later between recipients and non-recipients;
and probably many others. Does one of these motivate your skepticism? Or something else? This is purely for our edification, though we’re happy to discuss if you’d like.
FWIW, extreme poverty is generally declining over time, and our best-case scenario is to speed that up. But either way, something like 2⁄3 of all people are living on less than $10 a day—so not conventionally defined as extremely poor, but still people for whom $1/day could make a real difference.
The thing that motivates my skepticism is what I said in my first comment: I don’t think you can buy $11T of T-bills at anywhere close to current interest rates.
There aren’t any safe investment instruments other than treasuries?
👋 This comes up often enough that I added a footnote (no. 5) to address it; repasting it here
So our truly long-term vision doesn’t depend fully on T-bills, though what yield we get in such a scenario is hard to predict. Thanks for prompting us to communicate more clearly about this