Electronic currency also known as electronic money refers to money that is exchanged only electronically which is similarities with real cash. Usually, it must be involved in computer networks, the internet, and digital stored value when using electronic currency. It served as universal media of exchange. The main types of electronic currency are Direct deposit and Electronic Funds Transfer (EFT). These types of electronic money have been broadly used in some countries such as Hong Kong and Singapore.
Generally, there are few basic categories of electronic currency as below:
Identified Electronic Currency 
Identified e-currency encloses information revealing the identity of the person who originally withdrew the money from bank. It enables bank to track the movement of money. This category popularly as PayPal or WebMoney.
- Offline Electronic Currency
Offline e-currency means users can directly conduct a transaction without any interaction with the bank.
The popular examples of electronic currency are e-gold, Pecunix, Liberty Reserve, e-dinar, e-Ls and etc.
At the same time, there are some pros and cons of electronic currency as below:
Pros of electronic currency
- Easy and convenient
Electronic currency able users transfer funds to anyone, in any country at anytime by just clicking on the computer. Thus, user does not have to go to the bank to transact any business. Moreover, bankers also obtain the benefits indirectly which not necessary to deal with long queues of people. Hence, it increases the transactions speed in the bank. In addition, the percentage of transactions accuracy is increased with the help of machines and computers.
- Private and confidential
The information of holders and the source of funds are highly confidential as it never disclosed to anyone during the course of a transaction by using anonymous e-currency. Generally, the account only shows numbers, nick names, or email address during transactions. Hence, no one knows the source of money, actual name, phone number and address of the particular holder.
Cons of electronic currency
- Double-spending
Since the offline anonymous e-currency is indistinguishable from the original, thus perpetrator might think that counterfeiting would be impossible to detect. Thus, the users might copy some e-money and spend it twice. Users do not interact with bank during transaction, so bank unable to check whether the e-money is double spent.
- Virus
The online electronic cash system has the same problem as email account and personal computer which can be infected with a virus if security is provided insufficiently. Thus, the users’ information such as ID and password might be hacked. Therefore, the hacker will spend the e-currency of the actual user. Moreover, the user’s loss is bear by himself.
In conclusion, electronic currency will become more important as the improvement of technology in this world. Although it provides benefits to the users, the security of online electronic cash system is needed to be improved in order to reduce the risk of users.
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