Electronic Currency

Electronic currency



Thanks to Wikipedia. Electronic money (also known as e-money, electronic cash, electronic currency, digital money, digital cash or digital currency) 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.



Potential issue arises
The central bank will lose over monetary aggregates cause electronic currency able to flow freely across international borders. And even worse that, it would alter foreign exchange rates, disturb money suppliers and encourage overall financial crisis.

SMART CARDS
An electronic card containing an embedded microchip that enables predefined operations or the addition, deletion, or manipulation of information on the card. A memory chip card usually a “read-only” card, similar to credit card. Although the micro processor is capable of running program like computer does but it is not stand-alone. The program and data must be downloaded from and activated by some other device (such as ATM machine). Smart cards have three broad functions; authentication, storing value and storing personalised information. Authentication is concerned with ensuring only authorised individuals gain access to systems and buildings. A smart card can be used as an electronic purse to store units of value in different currency denominations as well as credit and other units of value such as bonus points or air miles. Values can be replenished on a smart card. The smart card can also be used as a portable storage device independent of some fixed location and with the capability of holding a large amount of data of different forms and for different purposes but usually of a personal nature.



Benefits of electronic currency or smart cards.

1. Using smart cards is safer than carrying cash for an individual.
2. Smart cards can improve access to services for the disabled and elderly.
3. It is a secure means of authenticating the identity of reader device.
4. It is portable and secure store of information available to all.
5. Access can be made available in geographical locations where on-line communication is not possible.
6. The opportunity of fraud is reduced using smart cards.