2. Alternatives Cubed: Alternative Currencies, Payment Systems and Finance Providers

In 2009 Paul Volker quipped that the only useful financial innovation in the 25 years leading up to the financial crisis had been the ATM. However, pace Volker, the last five years since the financial crisis have witnessed a wave of financial innovation. In the area of currencies, there is a blossoming number of local monies in Britain and virtual currencies like Bitcoin. In the area of payments, there are new initiatives to enable cheques to be cleared through processing images, and debits via texts, together with initiatives in mobile payments. In the area of finance provision, there are new retail (e.g. peer to peer lenders and equity crowd-funding) and wholesale developments (the rise of shadow banking). This paper tries to explain the parallel timing of all these innovations, in the process of setting out a more general framework for understanding endogenous socio-economic change.