A trust issue

xuanling11
Coinmonks
Published in
2 min readOct 2, 2022

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Photo by Joshua Hoehne on Unsplash

Systematic risk is coming — a trust issue.

The financial crisis in 1929 made the first central bank in the US collapse, and private bankers rescued the government.

The global financial recession in 2008 almost collapsed the private banks until the government recused them.

The slowly deteriorated of the banking system and central banks showed the crack of how the current financial system may not be as sustained as we believed.

The fiat currency ran on the trust system.

The original idea is to link with the concept of the social contract.

The social contract is between citizens and the nation, and they exchange legislative powers for equal treatment and freedom.

Similarly, the fiat system was constructed to let everyone exchange the legislative power on the financial system for equal ability to spend the fair fiat currency.

Therefore, even the fiat currency runs on the trust system, which does not mean that the money is worth zero if everyone does not trust the system. It only means…

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