Electronic Currency

Electronic currency, also known as electronic money, electronic cash, digital currency, digital cash as well as digital money. The use of the electronic money is done through the computer networks, the internet and also the digital stored value system. This money is only exchange electronically. It assisted in the online-based purchases and sales transaction conveniently.

Electronic benefit transfer (EBT)
--one of the examples of the use of electronic currency.
--It is the business-to-business E-commerce
--use to made payment electronically.

E-Check
--is also one of the electronic currencies.
--function as the paper check.
--an electronic version of a paper check with some additional function as compare with the traditional paper check.
--an useful tool for online shopping payment.

Advantages

Fast

It serves as a universal media of exchange which allowed users to make quick online payment ubiquity at anywhere anytime provided that there is an internet connection. With the speed of transferability, it enables the users to send and receive money instantly from anyone all around the globe.

Confidentiality

Privacy Current electronic currency systems vary in their effects on privacy from total anonymity, in which personally identifiable records are not created (blinded coins), to audited systems that collect and store every aspect of each transaction. One of the most attractive features of electronic currency is that, unlike real cash, it is anonymous. That is, when a electronic currency amount is sent from a customer to a merchant, there is no way to obtain information about the customer.

Security

The security of electronic currency is provided by the use of encryption. Some experts are weary about the security of online transactions.
Various types of safeguard are there to identify the fraud, charge back prevention, funds verification, PIN verification and others security system.
As an example, the use of RSA cryptography makes it almost impossible to break the code of a digital signature. Additionally, the enacted digital signature statutes require a certification authority to use a trustworthy system.
Therefore, even though there is speculation about the security of the Internet, electronic currency consumers are probably more secure in their transactions than the more traditional ways of doing business.

Disadvantages

Fraud

--is the MAJOR disadvantage of electronic currency.

It is because, if a consumer somehow misplaces his private key and a perpetrator uses it to withdraw funds, the bank would never know and the consumer would be liable.
Additionally, if the security code is broken and the message is intercepted, the hacker will be able to perpetrate fraud on the recipient of the message.

Peer-to-peer Double Spending

--is a potential drawback, if the consumer chooses a peer-to-peer transaction.
Whereas, in all other transactions in the electronic currency system, the bank will be able to check the serial number of each coin in a transaction against its database of spent coins, and if the coin has been spent, the transaction will be denied.

Illegal Activities

--Problem arises when it come to the collection of taxation.
--Additionally, electronic currency also creates the ease of possibility of money laundering.

Therefore, to encourage the implementation of E-currency,
more rules and regulation must be created to solve the disadvantages and problems of using the it, so that E-commerce could achieve its full potential in the future.

References:

http://www.murdoch.edu.au/elaw/issues/v6n3/ishman63_text.html

http://en.wikipedia.org/wiki/Electronic_money

www.amggateway.com/how_it_works-eCheck.html