Central banks also take an interest in alternative types of money, even though they would at first sight fall outside the ambit of the central bank’s usual competences. Central banks may have more than one reason for this. For starters, a considerable increase in the quantity and use of alternative money may undermine the efficacy of the central bank’s monetary policy.
Instead, it is a response by policymakers to avoid the “winner takes all equilibrium in networks” and “too big to regulate” problems, as conditions needed to promote competition, sound risk management and public interest.