The Codex Podcast

Darrell Duffie of Stanford is famous for being the world’s foremost scholar of financial market plumbing. Few will know that he was also a director of The Narrow Bank (TNB), the bank the Fed quietly strangled for the crime of being too safe.

In this episode we cover: Why did TNB die? What are the parallels to the state of stablecoins today, if any? Do stablecoins actually threaten bank deposits? What does a Treasury security purpose-built for on-chain settlement look like? What tokenized assets should serve as the backbone of financial system of the future?

Darrell’s Brookings paper with Don Wilson and TNB’s regulatory comment letter on Regulation D are both worth reading alongside this episode.

Behind closed doors, in Davos and DC, incumbent banks and challenger stablecoin companies are in the midst of a protracted fight. Should stablecoins be allowed to pay interest?

Trillions of dollars are at stake. Which arguments on each side actually make sense? Will allowing stablecoins to pay yield really destroy the global economy?

Omid Malekan of Columbia Business School is regarded among insiders as one of the few scholars who understands both the traditional financial system and crypto deeply. He is the ideal guest for this moment. In this conversation, we strip away the rhetoric to reveal what is really going on.