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What is money? A lawyer’s perspective on the evolution of the US payment system and dollars in the digital age

Author

Listed:
  • Cheng, Jess

    (Senior Counsel, Board of Governors of the Federal Reserve System, USA)

  • Torregrossa, Joseph

    (Associate General Counsel and Vice President, Federal Reserve Bank of New York, USA)

Abstract

This paper analyses the current frictions, and opportunities for evolution, in the US 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 US payment system and lessons from history, including the free banking era. This paper also discusses current developments, such as various central bank digital currency proposals and private sector stablecoin developments, in this context. The goal is to contribute to the discussion around the future of the US payment system, toward greater efficiency that does not risk introducing instability.

Suggested Citation

  • Cheng, Jess & Torregrossa, Joseph, 2022. "What is money? A lawyer’s perspective on the evolution of the US payment system and dollars in the digital age," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 16(1), pages 28-38, March.
    • Handle: RePEc:aza:jpss00:y:2022:v:16:i:1:p:28-38
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    More about this item

    Keywords

    US payment system; central bank digital currency (CBDC); Federal Reserve; legal framework; crypto currencies; money; stablecoins;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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