Abstract
In recent years there has been considerable interest in the development of electronic money schemes. Electronic money has the potentia l to take over from cash as the primary means of making small-value payments and could make such transactions easier and cheaper for both consumers and merchants. Electronic money is a record of the funds or "value " available to a consumer stored on an electronic device in his or her possession, either on a prepaid card or on a personal computer for use over a computer network such as the Internet. This paper argues that emoney, as a network good, could become an important form of currency in the future. Such a development would influence the effectiveness and implementation of monetary policy. If an increased use of e-money substantia lly limits demand for central bank reserves, it would require changes in the operationa l target of the central bank and a closer coordination of monetary and fiscal policies.