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Protecting The Sovereign's Money Monopoly, Gary B. Gorton, Jeffery Zhang
Protecting The Sovereign's Money Monopoly, Gary B. Gorton, Jeffery Zhang
Articles
Sovereign states have held a monopoly over the production of circulating money for well over a century. Governments, not private entities, issue circulating money. The advent of stablecoins—privately issued digital money that can circulate—raises the question of the sovereign’s money monopoly from the grave. Should private money circulate alongside sovereign money in the twenty-first century? We argue against coexistence to preserve financial stability and monetary sovereignty.
Through the lens of economic theory, we explore the coexistence question by revisiting the original debates that led to the sovereign’s money monopoly in England, the United States, Canada, and Sweden. In each case, …
Fenceposts Without A Fence, Katherine Di Lucido, Nicholas Kean Tabor, Jeffery Zhang
Fenceposts Without A Fence, Katherine Di Lucido, Nicholas Kean Tabor, Jeffery Zhang
Law & Economics Working Papers
Banking organizations in the United States have long been subject to two broad categories of regulatory requirements. The first is permissive: a “positive” grant of rights and privileges, typically via a charter for a corporate entity, to engage in the business of banking. The second is restrictive: a “negative” set of conditions on those rights and privileges, limiting conduct and imposing a program of oversight and enforcement, by which the holder of that charter must abide. Together, these requirements form a legal cordon, or “regulatory perimeter,” around the U.S. banking sector.
The regulatory perimeter figures prominently in several ongoing policy …