Advanced Search
MyIDEAS: Login to save this book or follow this series

Central Bank Responses and Regulatory Framework of E-Money: A Comparative Review of Central Bank Practices

Contents:

Author Info

  • Bambang Kusmiarso
Registered author(s):

    Abstract

    E-money is still very much in its infancy stage in most SEACEN countries, in spite of the fact that it has gained more acceptance in Europe. Among the SEACEN member countries, 5 countries have started e-money schemes while 2 countries have products that are very similar to e-money. Although the growth of e-money in some countries is quite impressive, the volume of e-money is still insignificant. As a consequence, the development of e-money is not expected to pose serious systemic risks or have much impact on central banking functions in the near future. Consequently, many central banks have not taken any serious actions but have rather closely monitored its development. Like the product itself, the regulation of e-money is still at the early stage and is evolving. Regulatory authorities have a choice concerning the timing of the introduction of any possible regulatory measures. Two different regulatory approaches in term of timing have been adopted ¨C the early approach as adopted by European countries, or a more relaxed ¡®wait and see¡¯ approach as adopted in the United States. One may argue that establishing a comprehensive framework at an early stage would risk stifling innovation. However, others argue that there may be risks that the overall cost of regulation will be significantly higher if there are a substantial delay in implementing measures that ultimately prove necessary. Harmonising minimum rules to ensure that institutions issuing e-money are stable and sound would promote confidence amongst business and consumers as well. With regard to the regulatory framework, most SEACEN member countries stress the importance of having new draft legislations since the existing regulations are not adequate to regulate e-money. Designing an appropriate regulatory framework for e-money schemes involve many aspects including system design and security, financial integrity of the issuers, consumer protection, and promotion of competition and innovation. The European countries recommend several minimum requirements for the framework for the issuance of e-money, namely (i) E-money issuers are subject to prudential supervision, (ii) solid and transparent legal arrangements, (iii) adequate technical, organisational and procedural safeguards, (iv) protection against criminal abuse, (v) monetary statistics reporting, (vi) redeemability of e-money into central bank money at par and (vii) possibility of reserve requirements. Further issues are interoperability between different systems and putting in place appropriate guarantees, insurance or loss-sharing schemes.

    Download Info

    If 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.
    File URL: http://www.seacen.org/GUI/pdf/publications/research_proj/2004/rp55.pdf
    Download Restriction: no

    Bibliographic Info

    as in new window
    This book is provided by South East Asian Central Banks (SEACEN) Research and Training Centre in its series Research Studies with number rp55 and published in 2004.

    ISBN: 983-9478-40-0
    Handle: RePEc:sea:rstudy:rp55

    Contact details of provider:
    Postal: Level 5, Sasana Kijang, Bank Negara Malaysia, 2 Jalan Dato? Onn, 50480 Kuala Lumpur
    Phone: 603-9195 1888
    Fax: 603-9195 1801
    Email:
    Web page: http://edirc.repec.org/data/seacemy.html
    More information through EDIRC

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:sea:rstudy:rp55. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Yunyee).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.