<P>Abstract</P>
<P>The literature on the economic effects of electronic money and banking lacks organization
and a common analytical framework. This paper identifies the main issues raised by e-money
and e-banking and presents them as six puzzles. Our solutions to the puzzles build a
framework for analyzing the effects of e-money and e-banking, and for choosing the
appropriate approach to regulating electronic money and banking. Although electronic
money and banking will likely not fulfill the more dire predictions in the literature, such as
the possible loss of central banks’ ability to control the money supply, they nonetheless will
need to be regulated carefully.</P>