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Monetary Transitions and Property Rights: Lessons from India's 2016 Demonetisation

Lupo-Pasini, Federico

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Abstract

States have routinely changed the form and the transmission mechanisms of money, from the ancient practice of coin de-basement, to the introduction of the Euro in 1999, or the recent push towards cashless payments. Very little has been said on the impact that monetary transitions have on money holders’ existing property rights. This article uses the 2016 Indian demonetization as a starting point to analyze, from a theoretical perspective, the challenges faced by states and individuals in the context of monetary transitions. This article argues that the process of conversion from one type of money to another can entail substantial practical, legal, or financial hurdles for money holders. For instance, individuals might not have access to banks, or they could be unable to operate digital payments. I define those hurdles as ‘‘transition costs.” I argue that such transition costs negatively affect property rights, and have a disproportionate impact on the poor.

Journal Article Type Article
Acceptance Date Oct 13, 2020
Publication Date 2021
Deposit Date Oct 22, 2020
Publicly Available Date Nov 11, 2020
Journal Annual review of banking law
Print ISSN 0739-2451
Publisher Boston University School of Law
Peer Reviewed Peer Reviewed
Volume 36
Issue 2
Public URL https://durham-repository.worktribe.com/output/1259199
Publisher URL https://bflr.ca/
Related Public URLs https://dx.doi.org/10.2139/ssrn.3848555

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Copyright Statement
This is a pre-copy edited, post-peer reviewed version of the article accepted for publication in the Banking and Finance Law Review. Reproduced by permission of Thomson Reuters Canada Limited.





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