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When an Argentine friend of mine moved to the U.S., he was astounded he had to use checks to pay his rent. This type of payment technology, he told me, was obsolete in his country.
This conversation happened more than a decade ago.
Today, many Americans still rely on checks. The latest evidence of this comes as the U.S. Treasury seeks to rush stimulus money into the hands of its citizens—only to discover that, for around 70 million people, this will entail printing pieces of paper and sending them through the mail.
Why is the U.S. still dependent on checks when there are so many easier ways to move money? Part of it may be cultural. There is something tangible about a piece of paper, and checks provide an opportunity for showmanship—think of those novelty checks held up by charity recipients or lottery winners. Or President Trump’s insistence that his name must appear on the stimulus checks. Some people just like checks.
But a better explanation for the ongoing reliance on checks is that it’s a symptom of a larger failure to update U.S. infrastructure. Just as the country is saddled with crumbling roads and ancient airports, its financial plumbing is outdated and inadequate. The technology exists for every American to receive stimulus money on their smartphone—perhaps aided by a form of blockchain ID system—but instead many will be standing by a mailbox waiting for paper to arrive.
This is doubly frustrating given the incredible innovation coming out of the U.S. fintech sector. As my Ledger teammate Jen Wieczner explains in the latest edition of Fortune magazine, companies like Chime are using their tech prowess to get money to cash-strapped small businesses faster than anyone else. Meanwhile, celebrities like Taylor Swift and ordinary people are using services like PayPal and Venmo in new ways to help their fellow citizens.
Are you waiting for a paper check? Share your story: ledger@fortune.com. Some submissions may be published in the newsletter, so please let us know if we can use your name.
Blame for failing to fully leverage the power of fintech in the current crisis appears to lie not with the companies, but with the dysfunction of the U.S. political system. As a fellow at Harvard Business School told Bloomberg, the fintech sector was ready to deliver their services but “the back end of the pipe that hooks up to the fire hose of money, they had to wait for the Treasury for that.”
It’s hard to know when or how our political leaders will get their act together to overhaul the country’s creaking financial infrastructure. But one reason for hope is that, as Jen notes, the last financial crisis resulted in a law that paved the way for the fintech revolution. Another is the possibility that some fintech-savvy entrepreneurs are ready to enter the political arena—just imagine what the likes of Andrew Yang could accomplish as Treasury Secretary. Think of that next time you have to write a check.
Jeff John Roberts
jeff.roberts@fortune.com
DECENTRALIZED NEWS
Credits
In 2019, fintech app new-customer conversion rates jumped over 70% ... Canada's first bitcoin-linked fund lists on the Toronto Stock Exchange ... 60 groups are working towards a coronavirus 'immunity passport' leveraging blockchain elements ... The creators of Cryptokitties blockchain collectibles will collaborate with Facebook's Libra ... Bitcoin regains network-securing 'hash power' after price drop ... Binance extends its dominance of crypto derivatives with mobile options trading ... Andreessen Horowitz aims to raise $450 million for a second cryptocurrency fund.
Debits
Google removes 49 Chrome extensions caught stealing crypto wallet keys ... Total Bitcoin miner revenues could drop to $6.7 million per day after the imminent 'halving' ... U.K. foreign exchange operator TravelEx paid hackers $2.3 million in bitcoin ransom ... Self-proclaimed Satoshi Nakamoto Craig Wright drops his libel suit against pioneer Adam Back.
PAY IT FORWARD
We got some insightful comments from readers on the economic impact of slow U.S. unemployment and relief payments. Here are some highlights:
I generally really appreciate your articles but… I think you are being somewhat unfair to the institutions that need to promptly convert the new 800+ page law into action ... How do you expect them to be able to handle a 100x increase in loan demand at a time when their own internal productivity is hampered by the CV restrictions? Seems unreasonable to me. - Peter Jackson, CPA
Thank you, this was a remarkable synthesis on an underdocumented dimension of the crisis! (= lack of speed)! - Nicolas C.
The eviction moratorium in effect now is impractical. Landlords are supposed to add outstanding amounts until the moratorium is over - can you imagine the leases which end during the crisis, or end shortly after? Landlords cannot effectively enforce. With the installments plus rent due, it is unlikely that a tenant can afford it. There will be so many evictions, it would flood the courts, an unwise stress and waste of time ... By paying the median rents or the median residential mortgage applicable to the City, one alleviates the stress that was, and is to come, with rent and mortgage payments. - Amos Ang of property manager Fairflock, arguing for government rent support directly to landlords.
We always welcome comments, tips, or feedback to ledger@fortune.com.
FOMO NO MO'
“It’s the furthest thing from the world we’re living in right now ... When we’re all inside — and so many people are losing their jobs and can’t afford to pay rent — to live in a world where you don’t have to do that is tremendously relaxing.”
John Eriksson, a New York-based Bitcoin trader, commenting on the economy of Nintendo's Animal Crossing to Mel Magazine. The game's fluctuating market for digital turnips has created a remarkable demand for market information, shared on a Reddit forum known as the Turnip Exchange. That's because turnip prices vary both over time, and between different segments of the game world, creating big arbitrage opportunities for those paying attention. However, these fluctuations are essentially random, unconnected to any broader market forces - which, of course, makes it a truly perfect playground for crypto traders.
BUBBLE-O-METER
$14 billion
The volume of Payroll Protection Program small-business loan applications received by a single fintech portal, Nav, in just three days. Levi King, Nav's founder, told PE Hub last week that no banks would accept the applications. "Banks are not trying to get new customers," said King. "They don't want any new traffic from people like us."
THE LEDGER'S LATEST
The coronavirus crisis is fintech's biggest test yet - and its biggest opportunity - Jen Wieczener
A new Visa card offers Bitcoin rewards - here's how it works - Jeff John Roberts
How to avoid the coming wave of coronavirus investment scams - David Z. Morris
During coronavirus, CEOs David Solomon and Brian Moynihan stand alone - literally - Jen Wieczener
Why the SBA loan process is moving so slowly - Anne Sraders
How to make sure your stimulus check isn't delayed - Rey Mashayeki
Are SBA small business loans running out? Here's what we know - Lance Lambert
PayPal is now offering Paycheck Protection loans to more than 10 million small businesses - Jen Wieczener
Debt collectors could seize your stimulus check before you get a chance to use it - Jeff John Roberts
MEMES AND MUMBLES
It was inevitable that the ubiquitous Ghanaian Funeral Dancers meme would be adapted to President Trump's announcement of a task force dedicated to quickly reopening the economy. In these times, the grimmest of humor seems all too appropriate.
This edition of The Ledger was curated by David Z. Morris. Contact him at david.morris@fortune.com.
