Can banknotes and coins be complemented by electronic central bank money?
News Gabriele Camera shows how the concept of money rapidly changes as a result of innovations in the area of computer-based encryption technology.
Technological development has made it possible to create cost-effective electronic alternatives to banknotes and coins. The author takes the scientific literature in the field as his starting-point and defines what money is and how it is used. Deeper analysis follows of the opportunities and difficulties involved in issuing new types of money or means of payment. A central issue is to what extent the central bank is more suited to issuing electronic money than private agents.
The article is included in this year's first issue of the Sveriges Riksbank Economic Review, which was published 20 January 2017.
Gabriele Camera
Economic Science Institute, Chapman University and WWZ, University of Basel