Working Paper: Mobile Finance in Developing Countries, by Rohan Grey
In a new Working Paper entitled “Mobile Finance in Developing Countries: Macroeconomic Implications and Potential,” by Rohan Grey, Research Fellow at the Binzagr Institute, explores “the macroeconomic implications of the global proliferation of mobile finance technologies in developing nations from a modern money theory (MMT)-informed perspective.” Rohan begins the analysis with an overview of the origins of, and recent developments in the mobile finance industry, and its relationship to traditional finance and banking operations. Next, he introduces the MMT paradigm, focusing on the implications of three core observations: 1) the tax-driven nature of modern money; 2) the hierarchy of money; and 3) the role of publicly-issued safe assets in minimizing systemic fragility. Then, the paper explores the implications of the MMT view on contemporary debates around the future of mobile finance, before concluding with a recommendation for the creation of a universal, digital fiat money-based payments system, combined with unlimited liquidity provision by the central bank to the banking system, as a third alternative to the current model banking system and the ‘narrow bank’ model of the 1930’s Chicago Plan.” >> Read full paper here.