The economics of e-cash

Electronic cash (e-cash) may end government monopolies on the lucrative business of minting money, but, for all the hype over e-cash, one point is usually left out: it may never come to pass. It all depends on the economics of e-cash, and that´s a complicated mix of issues-including whether producers can find an opportunity for profit, whether consumers will accept it as money, and whether governments will allow it to flourish. It could end up as just another big idea with few important applications. E-cash includes an electronically-stored value designed for use either in a single transaction or in many. E-cash that is meant for repeated use is also called electronic currency. Currency and other kinds of e-cash store and convey value in and of themselves rather than merely representing a value residing elsewhere, such as a deposit account. By contrast, electronic checks and debit cards do not store any intrinsic value and thus are not considered as being e-cash, which can be used in transactions off-line and with no transfer of physical material