>Doesn't all regulation stifle innovation? there are regulations and there are regulations. >"make any new innovative money transmission system you want, but

>Doesn't all regulation stifle innovation? there are regulations and there are regulations. >"make any new innovative money transmission system you want, but keep $100,000 in an account so when you fuck up someone's paycheck, just for example, a reasonable regulation would just limit the per-transaction(or per-month per-person, etc, ...) amount to, lets say, $100 for unlicensed/unbonded companies. On the other side, the regulation that have the same $500K bond for any company is just very favorable for big established players. The $500K is nothing for AMEX or PayPal, and provides virtually no coverage for the risks these companies presents to consumers. Ie. if any of these companies fucks up the paychecks in their system, the $500K would be just a drop in the bucket. Even current banking regulation is designed way much better - basically it forces to keep reserves as percentage of the liability amount.