100% E-Money and its Implications for Central Bank Digital Currency
8 Pages Posted: 28 Jun 2019
Date Written: June 26, 2019
Many publications on Central Bank Digital Currency (CBDC) point out the possibility of granting the public access to CBDC through non-bank third-parties instead of letting the central bank interact directly with the public. However, little attention has been paid to the relationship between these approaches and 100% e-money, which is already issued in El Salvador and is legally possible in a few more countries. Therefore, this paper wants to investigate this relationship by comparing 100% e-money with two models, where CBDC is provided by third-parties which are known from the literature as the custodian and the intermediary model. The findings indicate that the intermediary model and 100% e-money display strong similarities, which has implications for CBDC research. So, research on third-party CBDC could be more goal-driven and give better policy implications. In addition, this research shows regulatory requirements on third-party CBDC and future research areas on 100% e-money.
Keywords: central bank digital currencies, electronic money, regulation
JEL Classification: E42, E58
Suggested Citation: Suggested Citation