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Opinion
The Editors

Here Comes the Internet of Money

Financial innovation has widened access to capital, improved its allocation across the economy and made the world more prosperous.
The future is here.
The future is here.

Paul Volcker, the acclaimed former chairman of the Federal Reserve, famously questioned the value of financial innovation. He said he saw the point of the automated teller machine ("more of a mechanical innovation than a financial one"), but that was about it. Financial innovation was an unproductive competition for excess profit and a cause of instability.

If Volcker is right, we'll soon have another problem on our hands, because a new wave of financial innovation is forming. This one could sweep over traditional banking, traditional payments systems, even the traditional idea of money. You think exotic asset-backed securities were a big deal? That was nothing.