IN 1815, Baron de Rothschild said: “I care not what puppet is placed upon the throne. The man who controls the money supply controls the empire, and I control the money supply.”

The aftermath of today’s Covid-19 crisis may make this saying truer than ever, or never as true again. The binge spending by nations and corporations needed to ensure their survival will strain the fiat money system like never before. 

The question, as Bloomberg’s Asian op-ed columnist Anjani Trivedi put it, isn’t just whether they’ll be able to repay their debts but how they can all simultaneously access the needed fiat currency when it comes due and at what cost.

The Malaysian Institute of Economic Research (MIER) estimates that we might see unemployment rise to 2.4 million people – roughly 15% of the Malaysian labour force. A similar proportion of small- and medium-sized enterprises will likely be eradicated by the economic effects of the virus.

And Time magazine’s cover warns us that the tough measures to stem the coronavirus outbreak could be in place for up to the 12-18 months that scientists said it will take to find a vaccine. In other words, we could all be in this for the long haul.

So that’s the bad news, which may or may not come to fruition as the forecasts are, frankly, more opinion than fact given the unprecedented nature and scale of this crisis. 

Is there a silver lining? I think if we can look beyond the crisis the smart money will return into fintech hubs which will increasingly interconnect with each other to become “smart fintech hubs”. 

The power of these fintech hubs to assist in the economic recovery is that they will bring hundreds of millions of the most underprivileged and displaced members of society into a new digital financial system.

According to the World Bank, 1.7 billion adults remain unbanked globally. Digital technology has the power to direct the flow of their cash transactions onto a new fintech-based highway.

Integrated into these fintech hubs, the use of blockchain ledger technology can ensure users control over their information and data without these being usurped by global tech giants, finally giving governments and its citizens ownership over the digital information they create and the economic value that derives from it. 

In this new digitised world, information and data will be the basis for and store of value, respectively, and the speed, flexibility, and reliability with which one can interact with it will be of paramount importance. Ultimately, information and data will become money itself. 

The crisis may thus mark the beginning of the end of top-down pumping of money from the unseen hands of global central banks and international development funds – to be replaced by information and data that directly release economic value to their originators and recipients. 

In this version of the Information Age speeded up by the coronavirus crisis, de Rothschild may be making his last stand before he goes down into the annals of history, much like the British Empire of which he spoke upon which the sun never set. – April 5, 2020.

* Dr Rais Hussin is CEO and president of Emir Research.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.