The Roles and Functions of Central Banks Fifth, even if digitization progresses, and cashless payments become more widely used, monetary policy and the lender of last resort functions of central banks are likely to remain effective. First, let me elaborate on the possible impacts of cashless payments on monetary policy.
One imaginable case is that crypto-assets, which are not denominated by sovereign currency units, become widely used for daily payments and settlements instead of domestic sovereign currencies. Theoretically, this situation is similar to "dollarization," where foreign currencies are widely used instead of domestic currencies, and the effectiveness of monetary policy could be substantially impaired.