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“The proposal is for a central bank to divide the monetary base into two separate local currencies—cash and electronic money (e-money).”
“E-money would be issued only electronically and would pay the policy rate of interest, and cash would have an exchange rate—the conversion rate—against e-money.”
“This dual local currency system would allow the central bank to implement as negative an interest rate as necessary for countering a recession, without triggering any large-scale substitutions into cash.”
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