Monetary Policy, Monetary Areas, and Financial Development with Electronic Money
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Summary:
Electronic money (e-money), as a network good, could become an important form of currency in the future. Such a development could affect monetary policy effectiveness. If an increased use of e-money substantially limits the demand for central bank reserves, this limitation would require changes in the central bank operational target and a closer coordination of monetary and fiscal policies. Also, the optimal size of monetary unions would be different. However, the current level of e-money use does not seem to pose a threat to the stability of the financial system. Thus, central banks can successfully implement the objectives of monetary policy.
Series:
Working Paper No. 2004/122
Subject:
Banking Currencies Digital currencies Monetary base Monetary unions
English
Publication Date:
July 1, 2004
ISBN/ISSN:
9781451854527/1018-5941
Stock No:
WPIEA1222004
Pages:
42
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