Looking forward : the role for government in regulating electronic cash
AbstractWith the year 2000 rapidly approaching, stored-value cards are already popular in some countries and are being introduced into the United States by private companies. Stored-value cards are one form of electronic cash—electronic substitutes for paper currency. Digital cash (also known as cybercash or ecash) is the other form of electronic cash coming into use today. It consists of bits and bytes in cyberspace and substitutes for paper currency in transactions made over the Internet.> Someday privately issued electronic cash may be a common means of payment in the United States. Looking forward to that day, government policymakers need to assess the impact these new forms of currency might ultimately have on the nation’s currency stock. If privately issued electronic cash, once commonplace, could threaten the long-standing safety, uniformity, and relative stability of the U.S. currency, then policy-makers must decide what, if any, forms of government intervention are appropriate.> Schreft argues there is a limited role for government in ensuring the quality of the nation’s currency when private issuance is allowed. She first describes the emerging forms of electronic cash and how they differ from today’s paper currency. She goes on to argue that the concern for policymakers is not that electronic cash is electronic, but rather that private firms are issuing it. Looking forward from the perspectives of economic theory and economic history, she explores the impact privately issued electronic cash might have on the nation’s currency and the potential role for government. Finally, she considers some specific regulatory alternatives for ensuring that the U.S. currency remains stable, safe, and uniform.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Federal Reserve Bank of Kansas City in its journal Economic Review.
Volume (Year): (1997)
Issue (Month): Q IV ()
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Sujit Chakravorti & Victor Lubasi, 2006. "Payment instrument choice: the case of prepaid cards," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 29-43.
- Azariadis, Costas & Bullard, James & Smith, Bruce D., 2001.
"Private and Public Circulating Liabilities,"
Journal of Economic Theory,
Elsevier, vol. 99(1-2), pages 59-116, July.
- Bullard, James & Smith, Bruce D., 2003.
"The value of inside and outside money,"
Journal of Monetary Economics,
Elsevier, vol. 50(2), pages 389-417, March.
- James Bullard & Bruce D. Smith, 2001. "The value of inside and outside money: expanded version," Working Papers 2001-011, Federal Reserve Bank of St. Louis.
- Holthausen, Cornelia & Monnet, Cyril, 2003. "Money and payments: a modern perspective," Working Paper Series 0245, European Central Bank.
- Stacey L. Schreft, 2002. "Clicking with dollars : how consumers can pay for purchases from E-tailers," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 37-64.
- Li, Yiting, 2006. "Banks, private money, and government regulation," Journal of Monetary Economics, Elsevier, vol. 53(8), pages 2067-2083, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lu Dayrit).
If references are entirely missing, you can add them using this form.