Consultation on Policy Options for E-Money and Deposit Insurance
The International Association of Deposit Insurers (IADI) is inviting comments on a draft report setting out policy options for deposit insurance in dealing with E-money.
This consultation builds upon on findings of the Policy Council Committee’s E-Money Working Group, as presented in the draft paper, “E-Money and Deposit Insurance: Policy Options”. Stakeholder feedback will help shape the development of effective policy options that enhance user protection, financial stability, and financial inclusion.
Background
E-money is an electronic store of monetary value. It is expressed in official monetary units and redeemable at par. Users can make payments and store value digitally. The concept of e-money and its economic significance differ across jurisdictions. In regions with limited access to traditional banking systems, e-money has emerged as a significant innovation.
E-money offers many benefits but also poses risks such as liquidity, credit, market, and operational risks. These risks affect e-money issuers (EMIs) and insured deposit-taking institutions (IDTIs) safeguarding user funds (the “float”). Prudential regulation and supervision are essential, but residual risks to the users remain, particularly in the event of the failure of the EMI or of the IDTI holding the float.
The draft report proposes three policy options for integrating e-money into deposit insurance frameworks, each with distinct benefits, challenges, and implications for stakeholders. The appropriate policy option depends on the specific characteristics of the e-money market and the regulatory environment in each jurisdiction.
Consultation
Stakeholders are invited to comment on the report. Comments are particularly invited on the following questions:
- Does the report clearly establish how users of e-money are to be effectively protected, for example, by emphasising the relevance of prudential regulation and supervision as a prerequisite for any treatment of e-money by deposit insurance systems? Are there additional policy tools that could enhance user protection?
- The report proposes policy options for deposit insurance in two failure scenarios: the failure of the IDTI safeguarding the float and the failure of the EMI itself. Are there other relevant failure scenarios that should be considered?
- For each policy scenario, the report outlines technical considerations for deposit insurers, along with use cases and preconditions for applying these policies. Are these considerations adequate and comprehensive? Are there any missing elements that could improve the effective implementation of these policy options?
How to Participate
Please submit your comments via email to consultation@iadi.org in PDF format. The deadline for submissions is 31 July 2025.
Unless explicitly requested to remain confidential, comments from external respondents (non-IADI members) will be published on IADI’s website after the consultation period closes.