Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/197911
Authors: 
Kahn, Charles M.
Rivadeneyra, Francisco
Wong, Tsz-Nga
Year of Publication: 
2018
Series/Report no.: 
Bank of Canada Staff Working Paper 2018-58
Abstract: 
Should a central bank take over the provision of e-money, a circulable electronic liability? We discuss how e-money technology changes the tradeoff between public and private provision, and the tradeoff between e-money and a central bank's existing liabilities like bank notes and reserves. The tradeoffs depend on i) the technological setup of the e-money system (as a token or an account; centralized or decentralized); ii) the potential improvement in the implementation and transmission of monetary policy; iii) the risks to safety and privacy from cyber attacks; and iv) 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.
Subjects: 
Digital currencies
Payment clearing and settlement systems
Financial services
Bank notes
JEL: 
E42
E51
E58
Document Type: 
Working Paper

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