“The rise of digital money” marks the launch of a new International Monetary Fund series, Fintech Notes. The publication offers a conceptual framework to categorize new digital monies, analyses risks and implications and presents some policy implications that could be taken into consideration by Central Banks.
The adoption of digital money could bring – according to the authors – to three different scenarios:
Coexistence: in the first scenario e-money and b-money will coexist, but this requires that banks rapidly adapt to the new framework by changing their business models.
Complementarity: in this second scenario e-money providers could complement commercial banks and this outcome is already visible in some low-income and emerging market economies. E-money can draw poorer households and small businesses into the formal economy, familiarize them with new technologies, and encourage them to migrate from making payments to seeking credit, more complex saving instruments, accounting services, and financial advice provided by commercial banks.
Takeover: in this scenario banks are transformed into private investment funds following massive deposit outflows.
The whole paper is available at this page.