Prudential regulation and supervision of e-money issuers should act as first lines of defence to protect e-money users. Extending deposit insurance coverage to e-money is not a one-size-fits-all solution. There are different options available, and their suitability and choice depend on the characteristics of the e-money market and the regulatory environment in each jurisdiction.

The IADI Policy Paper discusses four policy options for integrating e-money into deposit insurance systems: the default approach, the pass-through approach, the direct approach, and a combined approach. It distinguishes between failures of e-money issuers and of banks where e-money issuers may hold deposits. For each policy option, the paper discusses the effective protection offered, as well as technical considerations and preconditions for the approaches to function effectively.