The president and CEO of the Federal Reserve Bank of Cleveland, says,” money in the 21st century are proved to be different form the money of the current century as our money is from the previous century. Just like fiat money replace specie backed paper currencies, electronically initiated debits and credits will become the dominant payment modes, creating the potential for private money to compete with government-issued currencies." In the era, new developments in electronic currency are emerging. Therefore new catchphrases such as smartcards, online banking and electronic currency are being used to discuss money. However, what are these new forms of money? Who will use them? And how do they work?
What is Electronic Currency?
Cash is known in various forms as a tool of exchange and of storing value Although the coins and banknotes that are now abundant in their basic form have existed for thousands of years, the first bank note of the Swiss Federal State, surprisingly did not appear until 1907.
Today, nearly all of the deposit currencies in the world's banking systems are handled electronically through a series of inter-bank computer networks. Although banks have been able to move currency electronically for decades, only recently has the average consumer had the capability to use electronic transfers in any meaningful way.
Electronic currency is essentially a system that allows a person to pay for goods or services by transmitting a number from one computer to another. . Thus, electronic currency is the digital representation of money, or more accurately, the digital representation of currency.
Further Reading: Has the time for electronic currency come?
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