In this case, perhaps the large money center and regional banks would collectively take on the role of providing settlement balances to the providers of e-money. Let’s call them the settlement banks. Let us also assume that such settlement balances were convertible into balances held at the central bank, a link that would enhance the acceptability of and confidence in e-money.
Inflation has moved up lately as the effect of past increases in the dollar and declines in energy prices have faded. The 12-month change in headline personal consumption expenditures (PCE) prices was 1.9 percent in January, although this partly reflects a temporary boost from energy prices.