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Is money going digital? An alternative perspective on the current hype

Author

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  • Daniel Gersten Reiss

    () (Central Bank of Brazil, Department of Banking Operations and Payments System’s Research Division)

Abstract

Current financial discourse suggests the imminence of a cashless society, a concept that arose from the global popularization of digital financial services and the development of technologies with the potential for application in financial markets. However, claims about the impending obsolescence of paper money are neither disruptive nor a novelty. Instead, this paper argues that the conversion of money from paper to bits has been a gradual, adaptive process, and that money is already digital. Moreover, in this paper we propose that the statuses of electronic money (e-money) and banknotes have switched in the view of monetary authorities.

Suggested Citation

  • Daniel Gersten Reiss, 2018. "Is money going digital? An alternative perspective on the current hype," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 4(1), pages 1-6, December.
  • Handle: RePEc:spr:fininn:v:4:y:2018:i:1:d:10.1186_s40854-018-0097-x
    DOI: 10.1186/s40854-018-0097-x
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    References listed on IDEAS

    as
    1. Santomero, Anthony M & Seater, John J, 1996. "Alternative Monies and the Demand for Media of Exchange," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 942-960, November.
    2. William Jack & Tavneet Suri, 2014. "Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution," American Economic Review, American Economic Association, vol. 104(1), pages 183-223, January.
    3. Berger, Allen N & Hancock, Diana & Marquardt, Jeffrey C, 1996. "A Framework for Analyzing Efficiency, Risks, Costs, and Innovations in the Payments System," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(4), pages 696-732, November.
    4. White, Lawrence H, 1984. "Competitive Payments Systems and the Unit of Account," American Economic Review, American Economic Association, vol. 74(4), pages 699-712, September.
    5. Ignacio Mas & Olga Morawczynski, 2009. "Designing Mobile Money Services Lessons from M-PESA," Innovations: Technology, Governance, Globalization, MIT Press, vol. 4(2), pages 77-91, April.
    6. Greenfield, Robert L & Yeager, Leland B, 1986. "Competitive Payments Systems: Comment," American Economic Review, American Economic Association, vol. 76(4), pages 848-849, September.
    7. White, Lawrence H, 1986. "Competitive Payments Systems: Reply," American Economic Review, American Economic Association, vol. 76(4), pages 850-853, September.
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    More about this item

    Keywords

    Digital money; Digital currency; E-money; Digital financial services;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L8 - Industrial Organization - - Industry Studies: Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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