Electronic Money Free Banking and Some Implications for Central Banking
AbstractThis paper discusses electronic money, its relation to free banking and some implications for central banking. It begins by introducing its conceptual framework for modern central banking, in terms of which it then rehearses the free banking argument. It then reviews the development of e-money in terms of both electronic payment methods and electronic issue, with special attention paid to the latter. The discussion includes both mainstream developments, such as Mondex, and 'alternative' schemes such as LETS. From here the paper proceeds by way of a consideration of the synergy between electronic issue of money and free banking precepts, to a consideration of some implications for the future of central banking generally. It offers an 'contestable' model of central banking, which endeavours to show the effects that e-money may be expected to have (and, indeed, may already be having) as regards monetary policy, financial supervision and seignorage. It concludes that even in its current stage of development, the emergence of e-money not only reflects and supports key free banking concepts, but may be nudging modern central banking towards free banking practice.
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Bibliographic InfoPaper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 0303.
Date of creation: 2003
Date of revision:
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Other versions of this item:
- Yuksel Gormez & Christopher Houghton Budd, 2004. "Electronic Money Free Banking and Some Implications for Central Banking," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 4(1), pages 67-105.
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- O39 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-01 (All new papers)
- NEP-CWA-2006-01-01 (Central & Western Asia)
- NEP-FMK-2006-01-01 (Financial Markets)
- NEP-MAC-2006-01-01 (Macroeconomics)
- NEP-MON-2006-01-01 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Barbara A. Good, 1998. "Private money: everything old is new again," Economic Commentary, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Cleveland, issue Apr.
- Rich, Georg, 2000. "Monetary Policy without Central Bank Money: A Swiss Perspective," International Finance, Wiley Blackwell, Wiley Blackwell, vol. 3(3), pages 439-69, November.
- Michael Woodford, 2000.
"Monetary Policy in a World Without Money,"
NBER Working Papers
7853, National Bureau of Economic Research, Inc.
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