Previously we have been using credit card, debit card and ATM card to make payments via the internet and today people have come out with a new brilliant idea to make payments; which is electronic currency. Electronic currency namely “e-money”, “electronic cash”, “digital money”, “digital cash” or “digital currency”, simply means as a unit of exchange that facilitates the transfer of goods and services through the internet.
Electronic currency composed by computer networks, the internet and digital stored value systems, for instances; electronic Funds Transfer (EFT) and direct deposits are examples of electronic currency. “EFT” is a computer-based system that is use to perform financial transactions electronically and the “direct deposit” is a banking term that uses a certain systems to transfer money.
Electronic currency composed by computer networks, the internet and digital stored value systems, for instances; electronic Funds Transfer (EFT) and direct deposits are examples of electronic currency. “EFT” is a computer-based system that is use to perform financial transactions electronically and the “direct deposit” is a banking term that uses a certain systems to transfer money.
Electronic currency can be used to send or receive money instantly to or from family, 
friends and
business associate worldwide. Furthermore, it allows you to make online payments with 24 hours a day from anywhere and collect real-time online payment from sale of goods and services, online games, auction and etc. Despite of that, it provides an easier way to exchange dollars for gold and vice versa.friends andAs times goes by, there are several countries that has been starting to implement electronic currency system such as Hong Kong’s Octopus card system which was started out with a transit payment system and now has grown into a widely used electronic currency system; Singapore also has an electronic currency implementation for its public transportation system (commuter trains, bus, and etc) and Netherlands has been introducing the use of a “Chipknip” which is designed to make payments at parking machines, shop and etc through the payment collection terminal without requiring a network access.
So, how to use an electronic cash? The first step is that consumer must open an account with an electronic cash issuer which refer to the bank that issues electronic cash or from a private vendor of electronic cash (PayPal) and then presents proof of identity.
Secondly, the consumer can withdraw electronic cash by logging the issuer’s website and presents proof of identity, like digital certificate issued by a certification authority, or a combination of a credit card number and a verifiable bank account number.
After the issuer verifies the consumer’s identity, they will deduct some amount from the consumer’s account which includes the charges of a small processing fee.
Next, the consumer can store the electronic cash into an electronic wallet (stored-value card). Finally, the consumer can authorize with third party (currency operator) to double check whether the payment is correct.
Secondly, the consumer can withdraw electronic cash by logging the issuer’s website and presents proof of identity, like digital certificate issued by a certification authority, or a combination of a credit card number and a verifiable bank account number.
After the issuer verifies the consumer’s identity, they will deduct some amount from the consumer’s account which includes the charges of a small processing fee.
Next, the consumer can store the electronic cash into an electronic wallet (stored-value card). Finally, the consumer can authorize with third party (currency operator) to double check whether the payment is correct.
The advantages of electronic currency is that electronic cash transactions provide an efficient way to users than other online payment methods, in terms of cost it will be less expensive and that efficient electronic cash transactions able to foster more business, in other words the electronic cash system offers lower prices for consumers. Previously, the conventional money exchange system requires banks, bank branches, clerks, automated teller machines differs from the new system that are able to manage, transfer and dispense cash. In addition, operating the conventional money exchange system is much more expensive.
The disadvantages of electronic currency is an electronic currency system does not provide an audit trail, as we know that electronic currency is similar to real cash which is not easily traceable. Thus, there is a high likelihood of money laundering to occur. Money laundering is a technique used by criminals to convert illegal funds where the criminal used to hide its true nature or source and then become legal money.
Therefore, money laundering happens by purchasing goods or services with ill-gotten electronic cash. The goods are then sold for physical cash at the public market. Besides, there are also some potential macroeconomic effects such as exchange rate instabilities and shortages of money supplies (total amount of digital cash versus total amount of real cash available), these issues may only be addressable by cyberspace regulations or laws that monitor the transactions and watch for signal of trouble.
Therefore, money laundering happens by purchasing goods or services with ill-gotten electronic cash. The goods are then sold for physical cash at the public market. Besides, there are also some potential macroeconomic effects such as exchange rate instabilities and shortages of money supplies (total amount of digital cash versus total amount of real cash available), these issues may only be addressable by cyberspace regulations or laws that monitor the transactions and watch for signal of trouble.
In conclusion, electronic currency can be defined as one form of online payment and today Malaysia
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