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Digital Currency, Digital Payments, and the 'Last Mile' to the Unbanked

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  • Oz Shy

Abstract

Digital forms of payment are either not accessible or highly costly for unbanked consumers. This is because these forms of payment must be "funded" by some source of money, such as cash or a bank account. That creates the "last-mile" problem for the unbanked. This article examines various solutions for the funding problem that have been proposed in the literature, by regulators, and in bills submitted to Congress.

Suggested Citation

  • Oz Shy, 2021. "Digital Currency, Digital Payments, and the 'Last Mile' to the Unbanked," Policy Hub, Federal Reserve Bank of Atlanta, vol. 2021(9), pages 1-9, August.
    • Handle: RePEc:fip:a00068:96617
    DOI: 10.29338/ph2021-09
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    References listed on IDEAS

    as
    1. Greene, Claire & Cole, Allison, 2017. "Financial Inclusion and Consumer Payment Choice," Journal of Financial Transformation, Capco Institute, vol. 46, pages 219-235.
    2. Leo Van Hove & Antoine Dubus, 2019. "M-PESA and Financial Inclusion in Kenya: Of Paying Comes Saving?," Sustainability, MDPI, vol. 11(3), pages 1-26, January.
    3. Shy, Oz, 2020. "Low-income consumers and payment choice," Research in Economics, Elsevier, vol. 74(4), pages 292-300.
    4. John P. Caskey & Andrew Peterson, 1994. "Who Has a Bank Account and Who Doesn't: 1977 and 1989," Eastern Economic Journal, Eastern Economic Association, vol. 20(1), pages 61-73, Winter.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    payments inclusion; financial inclusion; unbanked; digital currency; digital payments; central bank digital currency;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G59 - Financial Economics - - Household Finance - - - Other
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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