The rise of new and proposed monetary vehicles, including CBDC, stablecoins, payment service providers etc., is unprecedented. An important question for central banks is the extent to which these innovations upend the role of and implementation of monetary policy. This paper by the International Monetary Fund focuses on the interest rate channel and if digital money (especially CBDC) will change monetary policy and central bank operations. The authors argue that new policy instruments make sense only to the extent that there is limited substitutability between the various payment sectors. The paper also analyzes trends in currency-in-circulation, and how it may impact central bank’s seigniorage, monetary base, and transactional velocity of digital money if money demand declines. Liquidity outside the monetary base will also be important to understand.