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Payment Systems and Privacy

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  • Charles M. Kahn

Abstract

Privacy in payments is desired not just for illegal transactions, but also for protection from malfeasance or negligence by counterparties or by the payments system provider itself. Proposals to abolish cash take inadequate account of these legitimate demands for privacy. While central banks can play a useful role in setting standards for payments privacy, they are unlikely to have a comparative advantage at providing privacy. Therefore the replacement of cash by central bank electronic money is likely to spur demand for alternative means of payments to solve specific privacy problems.

Suggested Citation

  • Charles M. Kahn, 2018. "Payment Systems and Privacy," Review, Federal Reserve Bank of St. Louis, vol. 100(4).
    • Handle: RePEc:fip:fedlrv:00109
    DOI: doi.org/10.20955/r.100.337-44
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    References listed on IDEAS

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    1. Kenneth S. Rogoff, 2016. "The Curse of Cash," Economics Books, Princeton University Press, edition 1, number 10798.
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    Cited by:

    1. Borgonovo, Emanuele & Caselli, Stefano & Cillo, Alessandra & Masciandaro, Donato & Rabitti, Giovanni, 2021. "Money, privacy, anonymity: What do experiments tell us?," Journal of Financial Stability, Elsevier, vol. 56(C).
    2. Ngo, Vu Minh & Van Nguyen, Phuc & Nguyen, Huan Huu & Thi Tram, Huong Xuan & Hoang, Long Cuu, 2023. "Governance and monetary policy impacts on public acceptance of CBDC adoption," Research in International Business and Finance, Elsevier, vol. 64(C).
    3. Rainone, Edoardo, 2023. "Tax evasion policies and the demand for cash," Journal of Macroeconomics, Elsevier, vol. 76(C).
    4. Emanuele Borgonovo & Stefano Caselli & Alessandra Cillo & Donato Masciandaro & Giovanno Rabitti, 2018. "Cryptocurrencies, central bank digital cash, traditional money: does privacy matter?," BAFFI CAREFIN Working Papers 1895, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.

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    More about this item

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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