Inconsistent definitions of money and currency in financial legislation as a threat to innovation and sustainability

Bindewald, Leander ORCID: https://orcid.org/0000-0001-7323-6282 (2021) Inconsistent definitions of money and currency in financial legislation as a threat to innovation and sustainability. Journal of Risk and Financial Management, 14 (2). p. 55.

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Abstract

External shocks, like the climate catastrophe or the COVID-19 pandemic, as well as intrinsic fallacies like the securitization of bad debt leading up to the financial crisis in 2008, point to the need for updating our monetary and financial systems. Ensuring their adequacy and resilience is an important factor for sustainability at large. This paper examines the definitions of “money” and “currency” in financial legislation as a foundational factor in achieving systemic resilience by allowing or hampering monetary innovation and diversity. From the unencumbered vantage point that the practice of complementary currencies offers, definitions of the terms “money” and “currency” are here traced through the laws and regulations of the United States of America, from the beginnings of modern banking to the recent rulings on crypto-currencies. They are both found to be used and defined in contradictory ways that are inapt even in regard to conventional modern banking practices, let alone when applied to novelty in payment, issuance and valuation. Consequently, this paper argues that basic legal definitions need to be reviewed and consolidated to enable the innovation and diversification in monetary systems needed for long term macro-economic stability. With this in mind, a terminology that is consistent with monetary practice—current, past and future—as well as the procedural difficulties of reforming laws and regulations is proposed.

Item Type:	Article
Journal / Publication Title:	Journal of Risk and Financial Management
Publisher:	MDPI
ISSN:	1911-8074
Departments:	Institute of Business, Industry and Leadership > Institute for Leadership and Sustainability (IFLAS)
Additional Information:	This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/). Funding: This paper presents findings from the author’s PhD thesis, granted from Lancaster University in 2018, and supported through a three-year scholarship by the University of Cumbria, both in the UK.
Depositing User:	Anna Lupton
Date Deposited:	20 Mar 2023 11:31
Last Modified:	13 Jan 2024 11:46
URI:	https://insight.cumbria.ac.uk/id/eprint/6989

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