Beyond Banks: Technology, Regulation, and the Future of Money

How new technology is rapidly changing the nature of money and the way we pay

A diverse and growing range of financial institutions and platforms--from PayPal and Venmo to WeChat, Alipay, and the brave new world of stablecoins--have harnessed new technology to disrupt the system of money and payments as we know it. Beyond Banks explains why this disruption holds out the promise of faster, cheaper, more convenient, and more secure payments, but also how it increasingly risks exposing consumers, businesses, and governments to the problem of bad money.

Dan Awrey traces the origins of our current bundled system of banking, money, and payments. He explains why the problem of bad money--the result of antiquated and inadequate laws and regulation that fail to establish credible commitments to hold, transfer, or return a customer’s money on demand--requires that policymakers fundamentally rethink their approach toward the design of the laws and institutions at the heart of this system. He presents ways to effectively unbundle banking from money and payments, ensure the credibility of monetary commitments, and promote the stability of this system. Awrey also envisions a more forward-looking role for policymakers in encouraging greater technological experimentation, competition, and innovation in the realm of payments.

Beyond Banks sheds critical light on the important but too often dysfunctional relationship between technology, regulation, and money, and lays the foundations for a safer, more nimble, and more inclusive system of money and payments.

Dan Awrey is professor of law at Cornell Law School. He is the coauthor of Principles of Financial Regulation and a founding managing editor of the Journal of Financial Regulation.