Good morning. It's Thursday, Feb. 19, and welcome to this week's Business & Finance newsletter. This week, we're covering money laundering, personal checking accounts, and, given bitcoin's recent price dip, bitcoin itself. If you have any feedback for us (or if you just want to say hello), feel free to reply to this email and let us know!
As always, thanks for being a reader!
—Phoebe Bain, 1440 Business & Finance Section Editor
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What is money laundering?
Frequently associated with drug and human trafficking rings, money laundering is the process of disguising or concealing the criminal origins of illegally obtained or "dirty" money so it can be used without detection. Criminals engaged in illegal trade rely on money laundering to cover their tracks and make their profits usable without being caught.
Specifically, money laundering involves moving dirty money around to disguise its origin: Some criminals open fake bank accounts before purchasing fine art or real estate with the dirty money, for instance.
The practice of money laundering can be traced back roughly 2,000 years to Chinese merchants attempting to circumvent regional trading bans, but the term wasn't widely used until the 1970s after the Watergate scandal. Life magazine became one of the first media outlets to use the term "laundered" in reference to money in its 1967 article about American mobsters putting their profits from drug trafficking into secret accounts in the Bahamas to evade American tax laws.
However, money laundering didn't become a federal crime in the United States until 1986. Today, the United Nations estimates that between $800B and $2T is laundered annually.
Explore everything else we've found on Money Laundering.
Also, check out ...
> See a visual representation of how money laundering occurs. (View)
> Meet a government agent who laundered millions of dollars for Pablo Escobar. (Watch)
> The US once had a literal washing machine that cleaned dirty dollar bills. (Read)
> A former financial crime investigator says Hollywood has done a pretty good job depicting money laundering. (Watch) |
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Personal checking accounts, explained
A personal checking account is the financial hub that many people use to receive income, pay bills, and make everyday purchases. More than 96% of US households have one, with a 2022 median balance of about $2.8K. These liquid accounts are designed for frequent use and immediate access, trading the higher interest earnings of savings accounts for convenience.
Technically, a checking account is a demand deposit: money held by a bank but available on request through checks, debit cards, transfers, and ATMs. Deposits have been insured by the Federal Deposit Insurance Corp. since the Great Depression (up to $250K per depositor today).
Checking accounts emerged in medieval and early modern Eurasia to transfer funds safely without transporting bulky coin or bullion. Handwritten IOUs evolved into bank-issued checks in the 18th century, and by the 1850s, clearinghouses arose to handle the surge in paper checks. Bank computerization and automated clearinghouses catalyzed the adoption of payroll direct deposit in the late 20th century, making checking accounts nearly universal. In the 2000s, digital imaging laws enabled mobile check deposit, accelerating the shift toward electronic payments.
Today, personal checking accounts connect customers to payment networks while providing banks with funds to lend (roughly $17T in US deposits).
Explore everything else we've found on Personal Checking.
Also, check out ...
> Paper check usage is down 83% over 25 years. (View)
> Experts recommend keeping one to two months' worth of expenses in checking. (Read)
> American customers wrote just one check a year in 2024, on average. (Read)
> How the checking account has evolved into a platform of features rather than a product. (Listen) |
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Bitcoin 101
The oldest and most popular cryptocurrency, bitcoin is a digital cash alternative introduced in 2009. Since then, it has rapidly grown in popularity and now boasts a global user base. Enthusiasts point to bitcoin’s decentralized nature—meaning it is not created or controlled by any central government—lending it several potential advantages.
For the first few years, the uptake of bitcoin remained relatively slow. The first significant transaction was made in 2010 in a now-infamous purchase of two pizzas for 10,000 bitcoin (now worth just under $1B).
The currency has gone through several boom cycles but has steadily gained wider adoption as online exchanges (such as Coinbase or Crypto.com) became more common, opening bitcoin up to millions of retail investors.
As of this writing, the currency was valued at roughly $70K per single bitcoin (see bitcoin's current price), with a total market value of about $1.4T.
Explore everything else we've found on Bitcoin.
Also, check out ...
> Only 21 million bitcoin will ever be created—what happens then? (Read)
> Bitcoin's founder has always remained anonymous. (Watch)
> See a visual of how a bitcoin transaction works. (View)
> How much money you'd have now if you bought bitcoin years ago. (Explore) |
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One Story We're Taking Stock In |
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This week, the biggest story in the business world wasn't hard to find: Reactions to the opinion piece by OthersideAI CEO Matt Shumer titled "Something big is happening in AI—and most people will be blindsided" have littered every big-name business publication and Substack essay for days now. The "something big" in question? AI, he argues, will begin taking white-collar jobs en masse—not 20 years from now, not 10 years from now, but almost immediately.
Some experts agreed that the AI inflection point Shumer refers to means white-collar workers will need to find new business models for many jobs. But critics accused the essay of fearmongering, saying it reads like a sales pitch from an AI company CEO. |
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> Something big is happening in AI—and most people will be blindsided. (Read) |
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> Generative AI, explained in plain English. (1440 Topics) |
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