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

Awrey (Cornell Law Sch.; coauthor, Principles of Financial Regulation) argues that the financial system needs to be less bank-oriented. He asserts that is due to two reasons: first, other entities such as PayPal, Venmo, and cryptocurrencies are generally not covered by a financial safety net, which often includes, in part, deposit insurance. The author acknowledges that these types of technology-driven money and payment systems are often more convenient and, quicker, and sometimes cheaper for users, but his book points out that the risks of coming across bad players and senders of money are increasing. Secondly, these types of money and payment options are legally disadvantaged—compared to traditional banks—when it comes to transferring payments. His book reminds readers that even when a traditional bank is facing financial difficulties, its patrons and consumers are usually not even slightly inconvenienced, thanks to regulations that foster the credibility and legitimacy of bank deposits.