Electronic Currency

In 1982, Dr. Chaum founded the International Association for Cryptologic Research (IACR), which currently organizes some of the most important academic conferences in cryptography research. He has contributed to the industry advancement of electronic cash, partially in his role a founder of DigiCash is an electronic cash company, in 1990.


Electronic currency is essentially a system that allows a person to pay for goods or services by transmitting a number from one computer to another. These transactions are carried out electronically, transferring funds from one party to another, by either a debit or credit.These funds are instantly cleared and secured by using strong encryption, thus eliminating the payment risk to the consumer. It is only a matter of time before electronic currency will replace the present monetary systems. Thus, electronic currency is the digital representation of money, or more accurately, the digital representation of currency. Electronic currency provides a secure means of conducting transactions in electronic commerce. Electronic Funds Transfer(EFT) and direct deposit are examples of electronic currency.

The Basle Committee(BC) was formed to examine these new electronic payment systems such as stored-value payment products, and as a result, identified two models of electronic coin payment systems: (1) the single-issuer model; and (2) the multiple-issuer model.
In the single-issuer model, the issuer creates and distributes electronic coins to banks. The bank then issues the electronic coins to their customers by loading them onto stored value cards or computer hard drives. Using this model, consumers can also transfer electronic coins between themselves using electronic wallets. In the multiple-issuer model, consumers are able to receive electronic coins from a number of different issuers. A merchant is the party in the electronic transaction that receives coins as payment, deposits them with other issuers and then contacts the system operator.The system operator then consolidates these claims and transmits this information to the issuers

The Mondex smart card is an electronic wallet that holds five different currencies and is used to transmit electronic cash over the Internet. Using this system, a consumer can browse any online service that accepts Mondex. In order to purchase, a consumer inserts his Mondex card into the card reader attached to his personal computer.Once the consumer confirms that another valid Mondex device is present on the other end of the transaction, the customer's card transfers value to the vendor's card.

The electronic currency's unique feature is provided blinded coins so consumer can avoid the coin's redemption links its original holder to the transaction when the issuer's digital signature authenticates the serial number on each electronic coin.

There are some advantages of electronic currency like 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. Another advantages is Security, the security of electronic currency is provided by the use of encryption. Some experts are weary about the security of online transactions