Privacy as a public good: A case for electronic cash

Arbeitspapier

Privacy is a feature inherent to the use of cash for payments. With steadily increasing market shares of commercial digital payments platforms, privacy in payments may no longer be attainable in the future. In this paper, we explore the potential welfare impact of reductions in privacy in payments in a dynamic framework. In our framework, firms may use data collected through payments to price discriminate among future customers. A public good aspect of privacy in payments arises because individual customers do not bear the full cost of failing to protect their privacy. As a consequence, they may suboptimally choose not to preserve their privacy in payments. When left to market forces alone, the use of privacy-preserving means of payments, such as cash, may decline faster than is optimal.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bank of Canada Staff Working Paper ; No. 2019-24

Classification and Topics

• Classification: Wirtschaft ; Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems ; Financial Institutions and Services: Government Policy and Regulation
• Subject: Digital currencies and fintech ; Bank notes ; Payment clearing and settlement systems ; Central bank research

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Garratt, Rod ; van Oordt, Maarten R. C.
• Event: Veröffentlichung
• (who): Bank of Canada
• (where): Ottawa
• (when): 2019

Further information

• DOI: doi:10.34989/swp-2019-24
• Handle: http://hdl.handle.net/10419/210764
• Last update: 10.03.2025, 11:43 AM CET