What Canada Means for Crypto

“I sincerely believe that banking establishments are more dangerous than standing armies.” – Thomas Jefferson

In 1949, Frank McNamara was entertaining clients at Majors Cabin Grill restaurant in New York when he realized he left his wallet in a different suit. For our younger readers, a suit was a uniform men wore to project importance and, in this context, a wallet was a physical thing that carried important paper. Luckily for McNamara, his wife swung by the restaurant to pay his tab, but history was forever changed by that bit of forgetfulness.

Motivated by the embarrassing episode, McNamara and his partners co-founded Diners Club and launched the world’s first multipurpose charge card. In February of 1950, he returned to the same restaurant and became the first person to pay for a meal using a “credit identification card,” and the rest is history. According to data compiled by Statista, there are an estimated 725 million Visa, Mastercard, and American Express cards in circulation today in the US alone – almost four for every adult.

With the proliferation of credit cards and other forms of digital payment, consumers have slowly lost their visceral connection with money. A classic recommendation of budgeting gurus – one that now seems as outmoded as the answering machine – is to only pay for things using physical cash, since it somehow feels more real to part with four $20 bills from your purse or wallet than it does to swipe a credit card or tap your phone for an $80 purchase. Nowadays, such a recommendation would be virtually impossible to implement. The practicality of both accessing and using physical cash in our society is becoming increasingly difficult and rife with stigma.

The standard definition of money is any item or verifiable record that can function as a store of value, a unit of account, and a medium of exchange. When Richard Nixon took the US dollar off the gold standard in 1971, many were concerned the move would greatly diminish its function as a store of value. Judging by the debasement of the dollar’s purchasing power in the intervening 50 years, those concerns were well-founded.

Until recently, the dollar’s durability as a medium of exchange was never in doubt. Every piece of physical US currency was (and still is) adorned with the phrase “THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE.”