What is Money? A Lawyer's Perspective on U.S. Payment System Evolution and Dollars in the Digital Age

15 Pages Posted: 14 Jul 2021 Last revised: 23 Aug 2021

See all articles by Jess Cheng

Jess Cheng

Board of Governors of the Federal Reserve System

Joseph Torregrossa

affiliation not provided to SSRN

Date Written: July 12, 2021

Abstract

This article analyzes the current frictions, and opportunities for evolution, in the U.S. dollar payment system, by viewing money through the lens of network effects, interoperability, and their legal underpinnings. It gives a lawyer’s perspective on the workings of the U.S. payment system and lessons from history, including the free banking era. This article also discusses current developments, such as various central bank digital currency (CBDC) proposals and private-sector stablecoin developments, in this context. The goal is to contribute to the discussion around the future of the U.S. payment system, toward greater efficiency that does not come at the cost of introducing instability.

Keywords: Money, payment systems, central bank digital currency, stablecoin, crypto asset, network effects, interoperability

Suggested Citation

Cheng, Jess and Torregrossa, Joseph, What is Money? A Lawyer's Perspective on U.S. Payment System Evolution and Dollars in the Digital Age (July 12, 2021). Available at SSRN: https://ssrn.com/abstract=3885031 or http://dx.doi.org/10.2139/ssrn.3885031

Jess Cheng (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Joseph Torregrossa

affiliation not provided to SSRN

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