Electronic currency, also known as electronic cash, e-money, digital currency and etc. It refers to money or scrip which is exchanged only electronically. Typically, this involves use of computer networks, the internet and digital stored value systems. Electronic Funds Transfer (EFT) and direct deposit are examples of electronic money.
You cannot take this money into your hands, count with your fingers or sense its. However, it is real. Electronic money functions also prove its full value. It is the measure of value, payment means, means of circulation and (to a lower extent) means of hoarding. It meets all requirements stipulated for the world finance. That is why, electronic money are used as international payment unit.
The basic feature of electronic money from legal point of view is its emission. The number of electronic money shall be guaranteed with cash. Legislation and civil law of some countries have not yet establish some rules regulating the emission. Thereby, virtual money is still considered electronic monetary obligation of the issuer. The issuer is, mainly, the banks. As banks are not very trusted sometimes so the electronic money use is thus far limited. Government, for its part, issues cash and is very trusted by population and businessmen.
Although digital cash can provide many benefits such as convenience and privacy, increased efficiency of transactions, lower transaction fees, new business opportunities with the expansion of economic activities on the Internet, there are many potential issues with the use of digital cash. The transfer of digital currencies raises local issues such as how to levy taxes or the possible ease of money laundering. There are also potential macroeconomic effects such as exchange rate instabilities and shortage of money supplies (total amount of digital cash versus total amount of real cash available, basically the possibility that digital cash could exceed the real cash available).
Electronic currency has to overcome several obstacles in order to evolve further, 1) being able to use it through a wider range of hardware such as secured credit cards; and 2) linked bank accounts that would generally be used over an internet means, for exchange with a secure micropayment system such as in large corporations (PayPal).
You cannot take this money into your hands, count with your fingers or sense its. However, it is real. Electronic money functions also prove its full value. It is the measure of value, payment means, means of circulation and (to a lower extent) means of hoarding. It meets all requirements stipulated for the world finance. That is why, electronic money are used as international payment unit.
The basic feature of electronic money from legal point of view is its emission. The number of electronic money shall be guaranteed with cash. Legislation and civil law of some countries have not yet establish some rules regulating the emission. Thereby, virtual money is still considered electronic monetary obligation of the issuer. The issuer is, mainly, the banks. As banks are not very trusted sometimes so the electronic money use is thus far limited. Government, for its part, issues cash and is very trusted by population and businessmen.
Although digital cash can provide many benefits such as convenience and privacy, increased efficiency of transactions, lower transaction fees, new business opportunities with the expansion of economic activities on the Internet, there are many potential issues with the use of digital cash. The transfer of digital currencies raises local issues such as how to levy taxes or the possible ease of money laundering. There are also potential macroeconomic effects such as exchange rate instabilities and shortage of money supplies (total amount of digital cash versus total amount of real cash available, basically the possibility that digital cash could exceed the real cash available).
Electronic currency has to overcome several obstacles in order to evolve further, 1) being able to use it through a wider range of hardware such as secured credit cards; and 2) linked bank accounts that would generally be used over an internet means, for exchange with a secure micropayment system such as in large corporations (PayPal).
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