Should the central bank issue e-money?

Charles Kahn, Francisco Rivadeneyra and Tsz-Nga Wong

Journal of Financial Market Infrastructures

Abstract: Should a central bank take over the provision of e-money, a circulable electronic liability? We discuss how e-money technology changes the trade-off between public and private provision, and the trade-off between e-money and a central bank’s existing liabilities such as bank notes and reserves. The trade-offs depend on the technological setup of the e-money system (as a token or an account; centralized or decentralized); the potential improvement in the implementation and transmission of monetary policy; the risks to safety and privacy from cyberattacks; and the uncertain impact on banks’ efficiency and financial stability. The most compelling argument for central banks to issue e-money is to address competition problems in the banking sector.

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Related works:
Working Paper: Should the central bank issue e-money? (2019)
Working Paper: Should the Central Bank Issue E-money? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:rsk:journ7:7708026

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