Money and Payments – The Decade Ahead

Regulatory Ramblings

Yesha Yadav is the Milton R. Underwood Chair at Vanderbilt Law School, the Robert Belton Director of Diversity, Equity and Community and , and Associate Dean in addition to being a Professor of Law and Faculty Co-Director of the school’s LLM program at Vanderbilt University Law School.

Her research interests are in financial market and securities regulation, and corporate bankruptcy law – focusing on market structure, exchange design, payments, digital asset regulation, distressed debt and restructuring.
Before joining Vanderbilt's law faculty in 2011, Yesha worked as a legal counsel with the World Bank in its finance, private-sector development and infrastructure unit, where she specialized in financial regulation and insolvency, and debtor-creditor rights. Before joining the World Bank in 2009, she practiced from 2004-08 in the London and Paris offices of Clifford Chance in the firm's financial regulation and derivatives group. As part of her work in the area of payments regulation, she advised the European Payments Council on the establishment of the Single Euro Payments Area.
Since joining Vanderbilt, Yesha has served as an honorary advisor to India’s Financial Services Law Reform Commission and on the Atlantic Council’s Task Force on Divergence, Transatlantic Financial Reform and G-20 Agenda. She has served as a member of the Commodity Futures Trading Commission’s Technology Advisory Committee, where she sat on the Distributed Ledger Technology and Algorithmic Trading Subcommittees.
She earned an MA in Law and Modern Languages at the University of Cambridge, after which she earned an LLM at Harvard Law School. She was a Vanderbilt University Chancellor Faculty Fellow for 2019-21
In this episode of Regulatory Ramblings, she chats with host Ajay Shamdasani on the future of money and the shape currency and payment mechanisms will take in the coming decade. Money and payments have experienced a significant redesign over the last decade with money becoming increasingly digital cash use declining rapidly – especially since the pandemic, in countries like Sweden and urban China where cashlessness is the norm.
Yesha shares her views on technologies combining digital banking and smartphones spurring a rapid restructuring of the payments architecture for everyday consumers and businesses. The conversation looks at the design of payment systems, the inefficiencies that exist even as such systems have been scaled – including financial exclusion for lower income communities and communities of color – as well as the efficacy of emerging digital asset solutions such as stablecoins, where tokenized representations of currencies like US dollar or the Euro move on rapidly computer networks (blockchains), transferring money in minutes and cheaply.
The discussion moves on to exploring the risks emerging with a highly bank centric payments system (as is the case in the US less so in EU). As shown in the U.S. in March 2023, bank collapses mean that payment systems can also be disrupted (e.g., the collapse of Signature Bank caused a big disruption to the Signet payment system). Further, money kept by non-bank payment providers at US banks was also in peril where accounts exceeded the federal insurance limit (e.g., Circle had over US$3 billion in cash reserves held at SVB).
The chat concludes with Yesha’s thoughts some of the tensions arising from the current trend toward digitization and the potential for blockchain-based decentralized finance to take off and gain more mainstream acceptance.

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Kapitler

1. Money and Payments – The Decade Ahead (00:00:00)

2. Yesha Yadav's Career and Beginnings in Money and Payments (00:02:46)

3. Money and Payments: What's Next?  (00:06:20)

4. The Fundamental Role of Payment System Design in the Movement of Money within the Economy (00:13:28)

5. Modernizing the US Dollar Payment System for Improved Efficiency  (00:21:07)

6. Libra, CBDCs, and Regulatory Policy for Risk Mitigation in the Payment System  (00:24:04)

7. Assessing Global Standards-Setting for Digital Asset Technology and Interoperability (00:28:25)

8. Cash or Digital Money: Navigating Trade-Offs in an Imperfect World (00:31:57)

9. Public vs Private Money, 'Tide Suds' as Drug Currency  (00:34:54)

10. International Competition for Capital 101 (00:39:24)

11. Blockchain-Based Financial Innovations and the Need for the Maturing of Regulatory Frameworks (00:45:01)

12. Treating Crypto as a Security: Prudence or Pitfall? (00:48:06)

13. Maximizing Opportunities for Law Students: Beyond Legal Education  (00:51:41)