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Monetary Policy Implications of Digital Money

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  • Aleksander Berentsen

Abstract

SUMMARY The term digital money refers to various proposed electronic payment mechanisms designed to use by consumers to make retail payments. These mechanism are based either on wart cards or on network money. Smart cards could potentially replace currency as the predominant means to pay for retail purchases. Software‐based digital money products (network money) bring cheap electronic funds transfers to individuals and small firms. This paper examines how digital money affects the demand for money and how this process, in turn, affects the demand for reserves, monetary control, and the monetary transmission mechanism. ZUSAMMENFASSGNG Der Begriff ‘Digitales Geld’ bezieht sich auf verschiedene Vorschläge fur elektronische Zahlung‐ssysteme, die von den Konsuinenten zur Bezahlung von Einkäufen im Einzelhandel verwendet werden können. Diese Zahlungssysteme basieren entweder auf ‘smart cards’ oder auf ‘Netzwerk‐geld’. Smart cards können möglicherweise Bargeld als vorherrschendes Zahlungsmittel im Einzelhandel ersetzen. Software‐basierte digitale Geldprodukte (Netzwerkgeld) ermöglichen demgegenüber einen billigen Transfer von Geld an Einzelpersonen und kleine Unternehmen. Dieses Papier untersucht, wie digitales Geld die Geldnachfrage beeinflusst und welche Auswirkungen dies wiederum auf die Nachfrage nach Reserven. die Kontrolle der Geldmenge und die montären Transmissionsinechanisinen hat. RÉSUMÉ Le terme monnaie digitale se refère à différents méchanismes de payment, ayant été proposées pour étre utilisés par les consomateurs pour effectuer leurs payments quotidiens. Ces méchanismens sont basés sur le principe de la ‘smart card’ ou du ‘network money’. Les ‘smart cards’ pourraient remplacer la inonnaie comme méchanism de payment prédominant pour I'achat quotidien. Par contre, le ‘network money’, monnaie digitale basée sur des logiciels, apporte une méthode peu coǔteuse pour les personnes particulières et les petites entreprises pour effectuer leurs transfers monétaires. Cet article examine comment la monnaie digitale influence la demande de la monnaie, et comment ce processus influence la demande pour les reserves monétaires, le contrǒle monétaire. ainsi que les méchanisines de transfers monétaires.

Suggested Citation

  • Aleksander Berentsen, 1998. "Monetary Policy Implications of Digital Money," Kyklos, Wiley Blackwell, vol. 51(1), pages 89-118, February.
    • Handle: RePEc:bla:kyklos:v:51:y:1998:i:1:p:89-118
    DOI: 10.1111/1467-6435.00039
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    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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