Electronic Currency

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Definition:

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. Also, it is a collective term for financial cryptography and technologies enabling it.

Many systems will sell their electronic currency directly to the end user. Some examples are such as Paypal and WebMoney, but other systems, such as e-gold, sell only through third party digital currency exchangers.

Some examples of Electronic Currency:

1. PayPal




2. neteller




3. WebMoney





4. Google Checkout






5. Microsoft Points








Global Digital Currency Association

The Global Digital Currency Association (or GDCA) is a trade association of electronic money operators, digital currency exchangers, merchants and users.

Future evolution of E-Currency:

The main focuses of digital cash development are

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

Theoretical developments in the area of decentralized money are underway that may rival traditional, centralized money. Systems of accounting such as Altruistic Economics are emerging that are entirely electronic, and can be more efficient and more realistic because they do not assume a zero-sum transaction model.

Issues/Problems Faced:

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). These issues may only be addressable by some type of cyberspace regulations or laws that regulate the transactions and watch for signs of trouble.

-Joel Vergis-