E-money has shown substantial growth in a number of countries in recent years, often driven by Providers, including telecommunications companies, mobile network operators and transportation companies. These Providers frequently have competitive advantages in the form of substantial existing networks, related expertise, and economies of scope.

Many countries have passed regulations to address risks inherent in the issuance of e-money. However, there is a discrepancy in the treatment of banks and Providers. When a bank or financial institution experiences financial distress, legislation often grants an authority resolution powers to ensure the orderly winding down of the institution while limiting systemic disruption and losses to deposit holders. These resolution powers do not generally extend to Providers, notwithstanding the economy-wide disruption which the collapse of a large Provider could cause.

Our research explores three approaches, legislative and non-legislative, to granting resolution powers in respect of Providers to limit losses in the event that a Provider experiences financial distress. Our briefing note on this research can be found here