Originally posted as a Twitter thread on January 15, 2021

The Internet has many legacies, but its greatest one is disintermediation — taking out the middleman. And the biggest ever disintermediation — of financial services — is coming to an app near you. This is where government should focus:
https://a16z.com/2021/01/15/fintechs-final-frontier/

Governments have monopolies on money and law-enforcement (only the gov’t can legally do those two things, crypto aside!). But there’s almost no way for consumers to interact with central banks! Just like there was no way for consumers to buy airplane tickets w/o travel agents

Want to send a wire? Get access to your PPP loan? Earn interest from the Fed (as banks do via “Interest on Excess Reserves”)? Got to be a bank. Consumers have to go through a travel agent, versus direct. Why can’t your SSN or FEIN be an “account” that can send/receive money?

This is not arguing for “postal banking” or any DMV-style nationalization of banking — which is a terrible idea. But monetary and fiscal policies that require intermediation are simply not as effective as “going direct” — which the internet and fintech allow.

Take interest rates and monetary policy in emerging markets. The Central Bank can/does hike rates to prevent capital flight. Doesn’t really work because banks “intermediate” and don’t provide that rate to consumers…who sell the depreciating currency in favor of USD/EUR.

In many emerging markets, banks hardly make unsecured loans to consumers. They just take deposits and loan to the government. Which is bad for the government, bad for their citizens, bad for their economy, bad for their currency.

More here. Fintech alone can’t solve this — but every single Central Bank should be thinking: how do I go direct? And I would love to see companies and tools (painful as the gov’t “sale” may be) that help facilitate this:
https://a16z.com/2021/01/15/fintechs-final-frontier/