Macro Musings with David Beckworth Jerry Dwyer on the History of Free Banking and the Future of Bitcoin
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Sep 8, 2025 Jerry Dwyer, a professor emeritus at Clemson and senior fellow at the Bitcoin Policy Institute, shares insights on the evolution of free banking. He reflects on his mentorship under Milton Friedman and discusses the historical context of banking in the U.S. Dwyer explores how stablecoins are shaped by blockchain technology and contrasts their regulatory differences across states. He also highlights the potential risks posed by quantum computing to cryptocurrency security and considers the future implications for Bitcoin and digital currencies.
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Free Banking Varied By State
- The U.S. free banking era (late 1830s–1865) varied greatly across states and outcomes.
- Michigan’s failures reflected frontier conditions and suspended specie payments, not free banking in general.
Why New York Free Banking Worked
- New York’s free banking succeeded because of denser markets, better information, and state rules on bond holdings.
- Legal and economic context, not the label 'free banking,' explains performance differences.
Free Banking International Lessons
- Comparing Scottish, Canadian, and U.S. free banking shows many workable private‑issue currency examples.
- The U.S. ended free banking for policy reasons, not because currency users universally demanded change.
