Advantages:

1. Convenience

2. Safety

3. Universal

4. Increase social Benefits

Disadvantages:

1. Requires strong support from a third party

2. New risks arise

3. Limited scope of use

First, electronic currency is:

At this stage, most electronic currencies are based on existing physical currencies (cash or deposits) and have "value standards" " and "value preservation" function, and the prerequisite that electronic currency and physical currency can be exchanged at a ratio of 1:1 is established.

As a means of payment, most electronic currencies cannot be separated from cash or deposits. They are transmitted and transferred electronically to settle claims and debts. Therefore, the function and impact of electronic money at this stage is essentially the relationship between electronic money and cash and deposits.

Second, there are four main types of popular electronic money:

1. Stored-value card type electronic money. Generally in the form of magnetic cards or IC cards, in addition to commercial banks, the issuing entities include telecommunications departments (ordinary phone cards, IC phone cards), IC companies (Internet cards), commercial retail companies (all kinds of consumer cards), government agencies ( Internal consumption IC card) and school (campus IC card), etc. After receiving funds from customers in advance, the issuing entity issues stored-value cards of equal value, making the stored-value cards a new "deposit account" independent of bank deposits. At the same time, the stored-value card pays by deduction when customers consume, which is equivalent to paying money in a deposit account. Deposits in stored-value cards are currently not subject to central bank reserve requirements. Therefore, stored-value cards can reduce the need for cash and current savings.

2. Credit card application electronic money. Refers to credit cards or quasi-credit cards issued by issuers such as commercial banks and credit card companies. You can borrow money for consumption within the credit limit specified by the issuer, and then repay it within the specified time. The widespread use of credit cards can expand consumer credit and affect the money supply.

3. Deposit utilization electronic currency. Mainly include debit cards, electronic checks, etc., which are used to electronically withdraw cash, transfer settlement, and transfer funds from bank deposits. The widespread use of this type of electronic payment method can reduce the cost of consumers going to and from the bank, resulting in a reduction in cash demand balance and speeding up the circulation of money.

4. Cash simulation electronic currency. There are two main types: one is electronic cash that is used based on the Internet network environment and stores binary data representing monetary value in the hard drive of a computer terminal; the other is electronic cash that stores the monetary value in an IC card and can be circulated independently of the bank payment system. electronic wallet. This type of electronic currency has the anonymity of cash, can be used for personal payments, and can be changed hands multiple times. It was developed to replace physical cash. The expanded use of this type of electronic currency can affect the currency issuance mechanism, reduce the seigniorage revenue of the central bank, and reduce the scale of the central bank’s assets and liabilities, etc.