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

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.