The Concept of Money in the 4th Industrial Revolution – A Legal and Economic Analysis

39 Pages Posted: 10 Mar 2020

See all articles by Emilios Avgouleas

Emilios Avgouleas

University of Edinburgh - School of Law

Sir William Blair

Queen Mary University of London - Centre for Commercial Law Studies; Queen Mary University of London

Date Written: February 17, 2020


This article explores some of the changes that the 4th Industrial Revolution brings to our understanding of money. Our analysis does not suggest that the only valid form of money is that provided or backed by the state. We rather argue that it is unlikely that money-like means of payment will prove sustainable in the long-term if not perceived as being vested with some form of legality. Still, mere legality will not prove to be sufficient for the new payment instruments to qualify as money. They must also prove to be able to serve as means of exchange/payment. A sharp reduction in value will diminish the credibility of the payment promise and thus user confidence/trust. Like acceptance of payment on sight, the use of money as a common measure of value is one of the most important properties of fiat (and metallic) money. Retention of value in times of stress is fundamental as regards the new assets’ ability to act as a measure of value and its ability to fit with common perceptions of money. The requisite enquiry should be based on empirical studies of the intertemporal behaviour of the instrument. We suggest that fiat money aside, instruments that could eventually qualify as “money” ought to pass the dual test of legality and relative retention of value. This approach does not suggest a return to the metallic rule, which would limit free circulation of money. It is rather a pragmatic reformulation of the characteristics that means of payment, which do not enjoy the backing (will) of the state, must exhibit to enjoy quasi-money or money-like status. Assets that display high volatility are, thus, unlikely to fulfil the functions of “money” and should instead be dealt under the law of investments if they qualify as such.

Keywords: Money, fiat money, digital money, cryptomoney, measure of value, means of exchange, cryptocurrencies, cryptoassets, bitcoin, Libra, stablecoins, gold standard, law of money, common law, money in property

JEL Classification: E40, E42, K11, K12, K22, P26

Suggested Citation

Avgouleas, Emilios and Blair, Sir William and Blair, Sir William, The Concept of Money in the 4th Industrial Revolution – A Legal and Economic Analysis (February 17, 2020). Edinburgh School of Law Research Paper Forthcoming, Available at SSRN: or

Emilios Avgouleas (Contact Author)

University of Edinburgh - School of Law ( email )

Old College
South Bridge
Edinburgh, EH8 9YL
United Kingdom

Sir William Blair

Queen Mary University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

Queen Mary University of London - Centre for Commercial Law Studies ( email )

67-69 Lincoln’s Inn Fields
London, WC2A 3JB
United Kingdom


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