Digital Currency
- [Princeton University]
- Overview
A digital currency is a purely digital form of money. It is not a tangible asset like cash or other commodities like gold or oil. Digital currencies can simplify current financial infrastructure, making currency transactions cheaper and faster. It can also ease the implementation of monetary policy by the central bank. Examples of types of digital currencies are cryptocurrencies, central bank digital currencies, and stablecoins. Digital currencies are vulnerable to hacking and can compromise user privacy.
- Digital Money
Digital money (or digital currency) refers to any payment method that exists in purely electronic form. Digital currencies are not tangible like dollar bills or coins. It uses an online system for accounting and transfers. A well-known form of digital currency is the cryptocurrency Bitcoin.
Digital currencies can also represent fiat currencies, such as dollars or euros. Digital currencies are traded using technologies such as smartphones, credit cards and online cryptocurrency exchanges. In some cases, it can be converted into physical cash by using an ATM.
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