Follow the E-money

Digital cash. Electronic purses. Smart cards. These terms elicit visions of an efficient, cashless future, when prepaid cards storing money values will replace cumbersome bills and coins. But as the world’s often somber central bankers see it, the gradual spread of electronic currencies challenges their ability to conduct monetary policy and manage their nations’ money ...

Digital cash. Electronic purses. Smart cards. These terms elicit visions of an efficient, cashless future, when prepaid cards storing money values will replace cumbersome bills and coins. But as the world’s often somber central bankers see it, the gradual spread of electronic currencies challenges their ability to conduct monetary policy and manage their nations' money supplies. To better understand this challenge, the Switzerland-based Bank for International Settlements (BIS) completed a four-year study in May on the state of e-money in 68 countries and territories.

Digital cash. Electronic purses. Smart cards. These terms elicit visions of an efficient, cashless future, when prepaid cards storing money values will replace cumbersome bills and coins. But as the world’s often somber central bankers see it, the gradual spread of electronic currencies challenges their ability to conduct monetary policy and manage their nations’ money supplies. To better understand this challenge, the Switzerland-based Bank for International Settlements (BIS) completed a four-year study in May on the state of e-money in 68 countries and territories.

According to the BIS report ("Survey of Electronic Money Developments"), e-money is thriving in specific areas, such as public transportation, telecommunications, or in the creation of a "tokenless and coinless environment" at one South African casino. Meanwhile, some central banks are proceeding cautiously, limiting themselves to the collection of statistics on the use and varieties of e-money. Others, such as the European Central Bank and the Central Bank of Chile, have created detailed supervisory and legal frameworks relating to electronic currency. Readers can download the full 104-page survey from the BIS Web site. And no money, electronic or otherwise, need change hands — it’s free.

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