Money Reflects Society

Anders Brownworth
3 min readNov 10, 2023

Money must reflect the values of the society that creates it. If not, it will invariably lack network effect and therefore won’t become money.

A liberal democracy generally considers privacy a core right. Some degree of privacy then must be reflected in its money.

But a purely private money conflicts with society’s need to limit financial activities it considers harmful.

The need for privacy and the need to limit bad activity seem to be more or less directly in conflict.

Balancing these two priorities is the core problem to be solved when creating a new form of money in a liberal democracy.

At issue here is the thought that to ferret out bad activity, some third party to transactions must monitor things.

But is a “god mode” whereby the full transaction graph is known a necessary component of such a balance?

Cryptography provides myriad new options here, few of which are well understood.

Consider threshold encryption and view keys. Combining these new capabilities with the existing system of checks and balances creates intriguing options.

Let’s consider an example. Revealing identity information typically found on driver’s licenses (name, date of birth and address) seems a bit much if buying a cup of coffee.

Why would someone choose to use a form of money that indelibly ties all of this information onto innocuous transactions when a more private option like cash exists?

Likely convenience supersedes privacy when deciding what payment method to use (paying with your phone is just easier) but privacy might become the primary reason if a digital cash existed that was equally as convenient.

For small purchases, what is society’s concern that warrants complete lack of personal privacy?

Now let’s consider the purchase of a $1M house. If someone shows up to the closing with a duffel bag full of cash, a number of considerations arise.

The seller needs to be confident in the legitimacy of each bill so they must go through 24 pounds of $100 bills checking for forgeries. They must also arrange security and some method of storage and transport.



Anders Brownworth

Applied CBDC Research — formerly Federal Reserve, USDC @, MIT / Podcaster / Runner / Helicopter Pilot