Anthony J. Pennings, PhD

WRITINGS ON DIGITAL ECONOMICS, ENERGY STRATEGIES, AND GLOBAL COMMUNICATIONS

How IT Came to Rule the World, 2.1: Data Technology and Money

Posted on | April 25, 2010 | No Comments

This is the 15th post in the mini-series How IT Came to Rule the World. Section 2 deals with the rise of electronic money and transactions.

The telephone, telegraph, and telex were all important parts of the international financial system prior to the 1970s, but political and technological changes initiated a major transformation in the speed and versatility of financial transactions. Data communication systems moved quickly from military experimentation to commercial exploitation as banks, news agencies, and other corporate actors who were moving branches and factories offshore utilized these new technologies. NASDAQ began transacting its first computerized equity trades in 1971 and Reuters had begun using computers and telephone lines to provide stock information internationally with its Stockmaster technology.

Reuters, a major international news agency long involved in the circulation of financial information, also moved quickly to develop a new computer system for sending out currency prices. Using leased telecommunication lines to banks and other customers, Reuters created the beginnings of a virtual international currency exchange market. Banks paid for receiving currency price quotes and news and could also pay to list their prices with the service. With floating currency values due to the breakdown of the Bretton Woods gold-dollar standard, exchange rates became very volatile, especially after the Arab-Israeli war broke out in late 1973.

Reuters’ new system called Monitor displayed monetary values on computer screens in banks around the world and created a new dimension to the electronic marketplace that had been created initially by the introduction of the telegraph and the ticker tape machines.

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AnthonybwAnthony J. Pennings, PhD is the Professor of Global Media at Hannam University in South Korea. Previously, he taught at St. Edwards University in Austin, Texas and was on the faculty of New York University from 2002-2012. He also taught at Victoria University in Wellington, New Zealand and was a Fellow at the East-West Center in Hawaii in the 1990s.

Category: financial technology, how IT came to rule the world, telegraphic political economy
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    Professor at State University of New York (SUNY) Korea since 2016. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, digital economics, and strategic communications.

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