We study a model of financial intermediation, payment choice, and privacy in the digital economy. Cash preserves anonymity but cannot be used for more efficient online transactions. By contrast, bank deposits can be used online but do not preserve anonymity. Banks use the information contained...

In the wake of ex-NSA contractor Edward Snowden’s surveillance revelations to the global public, and despite an unimpeded cross-border data flow and knowledge transfer being a pre-requisite for the development of the digital economy, governments around the world are increasingly tending to...