Digital Money in the Age of Globalization

The Emergence Of Electronic Money

The digitization of money profoundly affected the world’s capital markets, greatly reducing the costs of transmitting funds at the same time that neoliberal deregulation freed funds from the oversight of the state (Batiz and Woods, 2002). To expedite the movement of money, large firms, particularly commercial and investment banks, insurance companies, and securities firms, joined telecommunications firms to build an extensive network of fiber optics lines connecting the world’s major financial centers, particularly New York and London (Warf, 1995). Starting with the TAT-8 line in 1989, and continuing with a series of evermore powerful systems across the Atlantic and Pacific Oceans, fiber optics is the mode of choice for the firms that run the world’s economy. This infrastructure emerged as the backbone of the global financial system and played a powerful role in the growth of the internet. Using fiber optics, which greatly exceeded the capacity of competing systems such as satellites, financial institutions designed electronic funds transfer systems (EFTS) to shift funds effortlessly across borders, take advantage of differences in interest rates, speculate on exchange rate fluctuations, and avoid political upheaval.