When the world's second-largest stablecoin got caught up in the collapse of Silicon Valley Bank (SVB), it reprised the now-famous maxim of Nobuhiro Kiyotaki and John Moore. "Evil," the economists had claimed in a 2001 lecture, later made available as a paper of the same title, "is the root of all money." Turning a popular aphorism on its head was a ploy to enliven a technical discussion. "Evil is a strong word," they wrote. "You may find the moral category too severe for something as mild as breaking a promise. In which case, you may want to change the title to 'Distrust Is the Root of All Money.' But that wouldn't have quite the same ring." Events last week showed that the professors may have been right, not just in their analysis, but also in their hyperbole: People accept and hold money not because it circulates freely and stores value, but because it helps overcome the scourge of broken promises. For something to aspire to money-ness, it must be free of even the slightest doubt in that regard.
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