Electronic money vs. digital money

Electronic money vs. digital money

If we consider the subjective factors associated with the unprecedented growth in corporate and national debt, the dominant role of the United States in the global financial system, we can conclude that the global financial system is heading into an impasse. Against this background and for this reason, the cryptocurrency was created.

Electronic money vs. digital money

The circulation of money is not part of the financial market, because money does not function in it as an object of purchase and sale, but as a means of payment in the exchange of goods. The circulation of money also went through several stages of development – ??from monetary to cashless, from regional-national to global. The development of monetary circulation is faced not so much with objective problems, but with subjective difficulties associated with organizational and technical problems both within countries and at the global level. The criteria for the efficiency of money circulation are reliability and settlement time. The imperfection or even inefficiency of the cashless settlement system led to the emergence of electronic money and cryptocurrencies, which are so actively traded today with the help of BitQT apptrades and makes big profits.

E-money is money that has previously been made available by one person to another person. This person considers information about the amount of funds provided without opening a bank account to meet the monetary obligations of the person who provided the funds. A similar interpretation of e-money takes place in the EU. In the EU, e-money is understood to mean the payment obligations of the issuer in electronic form, which are made available to the user on an electronic data carrier. Such monetary obligations meet the following three criteria: they are recorded and stored on an electronic medium; issued by the issuer after receipt of funds from other persons in an amount equal to or greater than the monetary value issued;

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Electronic money is less money than local payment systems. Either real money, i.e. the currency of a specific country (fiat money), or fictitious banknotes ( non-fiat money ) circulate within these payment systems. However, non-fiat money is also money at the same time, because the organizers and participants in local payment systems initially invest real sums of money in it, within which they settle accounts among themselves.
The criteria for the efficiency of money circulation are reliability and settlement time. According to these criteria, electronic money surpasses the current system of cashless payments. Their main disadvantage is the locality of the payment systems. Removing this limitation and expanding the scope of settlements and payments to global payments is possible due to the advent of digital money, the form of which is cryptocurrency. Electronic and digital money differ according to the following criteria:

electronic money is money and digital money is not money in the traditional sense;
electronic money is circulated over the Internet using bank accounts when money is entered into and withdrawn from the system;
digital money is based on a fundamentally new technology – blockchain technology, is not subject to government regulation and circulates without bank intermediation.
Attention should be paid to the development of electronic money towards digital money. There is electronic public and private money. State e-money is a part of the local payment system and an integral part of the state payment system. The issuance and circulation of government e-money are based on national legislation. Electronic private money are electronic units of non-government payment systems that regulate their issuance and circulation through their rules. Therefore, the issuance and circulation of private e-money are not subject to government regulation.

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The advent of digital money is associated with the development and implementation of blockchain technology. Digital money is, so to speak, a generic sign for money, in which the technical component is in the foreground. Cryptocurrency is, so to speak, a kind of money, the characteristics of which are anonymity, decentralization and reliability. In the phrase cryptocurrency, the term “crypto” is appropriate because it illustrates one of the advantages of a new kind of money – security. But how accurate the term “currency” is is a question.

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