The People’s Ledger: How to Democratize Money and Finance the Economy

71 Pages Posted: 21 Oct 2020 Last revised: 15 Oct 2021

Date Written: October 20, 2020


The COVID-19 crisis underscored the urgency of digitizing sovereign money and ensuring universal access to banking services. It pushed two related ideas—the issuance of central bank digital currency and the provision of retail deposit accounts by central banks—to the forefront of the public policy debate. To date, however, the debate has not produced a coherent vision of how democratizing access to central bank money would—and should—transform and democratize the entire financial system. This lack of a systemic perspective obscures the enormity of the challenge and dilutes our ability to tackle it.

This Article takes up that challenge. It offers a blueprint for a comprehensive restructuring of the central bank balance sheet as the basis for redesigning the core architecture of modern finance. Focusing on the U.S. Federal Reserve System (the Fed), the Article outlines a series of structural reforms that would radically redefine the role of a central bank as the ultimate public platform for generating, modulating, and allocating financial resources in a democratic economy—the People’s Ledger.

On the liability side of the ledger, the Article envisions the complete migration of demand deposit accounts to the Fed’s balance sheet and explores the full range of new, more direct and flexible, monetary policy tools enabled by this shift. On the asset side, it advocates a comprehensive qualitative restructuring of the Fed’s investment portfolio, which would maximize its capacity to channel credit to productive uses in the nation’s economy. This compositional overhaul of the Fed’s balance sheet would fundamentally alter the operations and systemic footprints of private banks, funds, derivatives dealers, and other financial institutions and markets. Analyzing these structural implications, the Article shows how the proposed reforms would make the financial system less complex, more stable, and more efficient in serving the long-term needs of the American people.

Keywords: central banking, Federal Reserve, CBDC, digital dollar, digital currency, FedAccounts, central bank balance sheet, financial system, systemic risk, shadow banking, structural reform, Glass-Steagall, fintech, financial stability, monetary policy, National Investment Authority, infrastructure finance,

Suggested Citation

Omarova, Saule T., The People’s Ledger: How to Democratize Money and Finance the Economy (October 20, 2020). Cornell Legal Studies Research Paper No. 20-45, 74 Vanderbilt Law Review 1231 (2021), Available at SSRN: or

Saule T. Omarova (Contact Author)

Cornell University - Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

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