Banking on Distributed Ledger Technology: Can It Help Banks Address Financial Inclusion?
Despite its promise, distributed ledger technology is unlikely to draw unbanked consumers into the financial mainstream
Change is Coming: What the EMV Migration May Mean for Payments Innovation
This article considers how the upcoming shift from magnetic stripe to chip technology may affect the survival of card-based payment innovations.
Interchange fees and network rules: a shift from antitrust litigation to regulatory measures in various countries
This article summarizes the global trends in public authority involvement in payment card pricing and rules, examines reasons for the shift to regulatory measures, and considers potential implications for the United States.
Data Breach Notification Laws
Richard J. Sullivan and Jesse Leigh Maniff study individual provisions within states' data breach notification laws to evaluate their effects on identity theft.
Inclusion by Design: Crafting a Central Bank Digital Currency to Reach All Americans
One motivation for a central bank digital currency (CBDC) is financial inclusion—bringing unbanked Americans into the payments system. To meet this goal, a CBDC would have to be designed to meet the specific needs of the diverse unbanked population.
Comparing Means of Payment: What Role for a Central Bank Digital Currency?
This paper looks at the potential benefit that a central bank digital currency (CBDC) could provide in the context of existing payment mechanisms. Central banks today provide the primary payment mechanisms for trade and commerce: cash, used by the public, and electronic payment services, used by eligible financial institutions.
Safe-Haven Performance in the Age of Bitcoin
In past periods of financial stress, investors seeking “safe havens” have shifted toward government bonds and gold. In recent years, some have questioned whether Bitcoin could also serve as a safe haven. We compare the behavior of government bonds, gold, and Bitcoin from January 1995 through February 2020 and find that the 10-year Treasury note behaved like a safe haven consistently, gold occasionally, and Bitcoin never. During March 2020, however, none of the assets can be classified with confidence as a safe haven.
Déjà Vu All Over Again: What the Return of Private Currencies Could Mean for Central Banks
Private digital currencies, or “crypto-assets,” have surged in popularity recently, but they are not new to the payments landscape and may present familiar challenges for central banks. Although they have yet to fulfill the main functions of money, crypto-assets still have the potential to affect financial stability and the implementation of monetary policy.
Motives Matter: Examining Potential Tension in Central Bank Digital Currency Designs
As a new central bank liability, central bank digital currency (CBDC) has the potential to address various issues within current payments and financial systems. The motivation behind a CBDC will determine how it is designed; a CBDC designed to achieve one goal, such as broader financial inclusion, may have difficulty achieving other objectives.
Driver of choice? the cost of financial products for unbanked consumers
This paper examines whether some of the unbanked consumers' choice of general purpose reloadable (GPR) prepaid cards over checking accounts and alternative financial service (AFS) products can be explained by the cost incurred by those consumers. We compare the three types of products by constructing consumer models based on the actual behavior of GPR prepaid cardholders and applying those models to the fee schedules of actual products offered in the market. Overdrafts are a major factor affecting the cost rankings. For consumers who regularly or occasionally overdraw their accounts, checking ...