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Money which is exchanged only electronically is known as Electronic money. Utilization of computer networks, the internet and digital stored value systems is usually involved. Electronic money has forms like Electronic Funds Transfer (EFT) and direct deposit. Also, it is a collective term for financial cryptography and technologies allowing it.
Nowadays use of digital cash has been rather low-scale while electronic money has been an important problem for cryptography. Hong Kong's Octopus card system which began as a transit payment system and has grown into a commonly used electronic cash system has been one rare success. Public transportation system of Singapore also has an electronic money realization, which is very similar to Hong Kong's Octopus card and built on the same type of card. Chipknip is also one realization in the Netherlands.
Alternative systems
A system of debits and credits is simply what electronic or digital money is, it is used to exchange value, within another system, or itself as a separate system, online or offline. The provider of electronic money service itself is being sometimes referred to using the expression electronic money. Gold may be used by private currency such as digital gold currency to provide additional security. Also, exclusive currencies such as Eagle Cash are used by some private organizations, such as the US military use.
Electronic currency will be directly traded to the end user by many systems, such as Gogopay, PayPal, WebMoney and Wirex, but third party digital currency exchangers are the only trade mean of other systems, such as Liberty Reserve.
Deposits work similarly to banks in the case of Octopus Card in Hong Kong. The money is deposited into banks after Octopus Card Limited receives money for deposit from users, which is similar to debit-card-issuing banks redepositing money at central banks.
Electronic transactions are being implemented by some community currencies, like some LETS systems. Creation of electronic community currencies is allowed by Cyclos Software.
Distributed system of electronic money independent of local currency is developed by a project called ripple monetary system.
Off-line 'anonymous' electronic money
The merchant doesn't need to interact with the bank before accepting a coin from the user on using off-line electronic money. Instead he deposits multiple coins Spent by users after collecting them later with the bank. In principle this could be done off-line, i.e. to exchange e-cash for cash, the merchant could go to the bank with his storage media. Nevertheless the bank guarantees to the merchant that the user's e-coin will either be accepted by the bank, or the bank will be able to identify and punish the cheating user. In this way spending the same coin twice (double-spending) has been avoided. Protection against cheating merchants is needed for Off-line e-cash schemes, i.e. merchants that want to deposit a coin twice (and then blame the user).
Anonymous ecash was introduced by David Chaum using cryptography. Unlinkability between withdrawal and spend transactions has been achieved using blind signatures. In cryptography, e-cash usually refers to anonymous e-cash.
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