Why life can't be simpler

This week:

  • 💬 The world's most expensive encrypted messaging service

  • ⛓ What if Russia Turns to Crypto?

  • 🧘‍♀️ Why life can't be simpler

  • 🔬 Desperation-Induced focus

  • 😉 Unknown Unknowns

💬 The world's most expensive encrypted messaging service

Last week we wrote about The European Commission removing Russian Banks from SWIFT. Most people miss that SWIFT is not a payment system but a messaging system (like email) used by over 11 000 banks in over 200 countries. Patrick McKenzie from Stripe has explained how money moves internationally and why SWIFT is the world's most expensive encrypted messaging service. He also explains that SWIFT does not even monopolize the thing that everyone assumes it monopolizes:

There is a document in a binder in Tokyo which describes "How to move money to the U.S. if SWIFT is down" and it does not say "Pause the Japanese economy until SWIFT gets their #%()#% together." MUFJ knows the phone numbers for the U.S. banks holding billions of dollars of their money and can transact with them in any of the ways that you'd expect a bank to make available to a customer with billions of dollars deposited.

The next in line with the financial sanctions of Russia is Visa and Mastercard, which are suspending their operations in Russia. More specifically, any transactions made with Mastercard or Visa cards issued by banks in Russia won't work outside of Russia. In contrast, any cards issued by banks outside the country won't work at Russian merchants or ATMs.

In Norway, Vipps has created a unique Vipps number (2170) for the six largest aid organizations that automatically distributes the donated money between the organizations with boots on the ground in Ukraine.

⛓ What if Russia Turns to Crypto?

With their currency crashing and bank accounts are frozen – what if Russia turns to crypto? Norwegian "experts" state that cryptocurrency can play an important role in an economic crisis. In some ways, it is too late for Russia, but more citizens and countries will probably hold some of their reserves in crypto in the future to avoid financial censorship. Those who will make the most money from this are probably those who sell picks and shovels like Coinbase:

🧘‍♀️ Why life can't be simpler

Illustration from "settings are not a design failure"

We'd all like life to be more straightforward. Especially considering the situation in the world at the moment. But we also don't want to sacrifice our options and capabilities. Farnam Street has written about a helpful framework for understanding this called Tesler's law:

The total complexity of a system is a constant. If you make a user's interaction with a system simpler, the complexity behind the scenes increases.

This pairs nicely with Adrien Griveau from Linear, which has written about why settings are not a design failure. In this regard, default options are also fundamental as Steven Harris writes in this blogpost:

When one firm raised the default for employees to save towards their income from 0% to 3%, the percentage of people who save more increased. Surprisingly, however, the default decreased the amount of people electing to save more than 3%, which raised the question of what is an optimal default option?

🔬 Desperation-Induced focus

Sequoia-partner Ravi Gupta has written about why processes are harmful and why startups should delay rather than rush introducing them:

Every time I'm asked about some newly proposed process, I ask: "Why do you think you need this?" The answer is usually some version of "[Smart Person] said that we need to have a process now that we are getting bigger." Usually this Smart PersonTM is from a big company.

😉 Unknown Unknowns

To round of this issue, here is a practical nugget you can try out in the week ahead 😂:

That's it for this week 👋

Remember, if you’re enjoying this content, please do tell all your (fintech) friends to hit the subscribe button! If you have some feedback you can always just hit reply!

Marius Hauken, partner Stacc X