A Study of the Possible Consequences in the Event of an Accelerated Issuance and Widespread Use of Private e-Money: A Case Study of Montenegro

The main goal of this chapter is to show what changes occur in case of accelerated issuance and use of private digital money. Respectively, in this work the authors analysed an environment that would arise in the case of parallel use of private and public electronic money. The analysis was carried out for the case of Montenegro. For the analysis of the perception of the monetary authority, authors conducted a qualitative research that was based on deep interview, while for the testing of the attitudes of clients the authors have used the quantitative research that was based on a survey. The research results showed that accelerated issuance of private digital money and its parallel use with the State electronic money can lead to negative impacts. Research has shown that the new conditions could lead to financial instability, difficulties in conducting monetary and fiscal policies, as well as to problems in the operations of the Central Bank and deposit institutions. The results of this chapter may be a contribution to the discussions on private digital currency, understanding of the attitude of the monetary authorities and private clients in terms of digital money, especially in small and developing countries. Also, they can serve as a literary basis for a comparative analysis of this kind in developing countries, such as Montenegro. Results can also be useful to employees in the banking sector and regulatory bodies to better understand the environment in which private and state money are parallel operating. According to the authors’ knowledge, previous researches on the topic of private digital money are not faced with attitudes of clients and monetary authorities, so with this chapter, the authors have sought to rectify the literary gap.