Virtual money application arcas and effects

ABSTRACT The world of finance is changing rapidly. Key forces driving the change are the development of new technologies and the growth of worldwide financial linkages. The declining cost of communications has driven many of these changes. Using some kind of substitutes for cash (cheque, credit card, e.g.) for several years, now with the emergence of electronic commerce on the Internet, these systems seem not to be effective enough. So, new electronic payment systems have to be developed. Various electronic payment schemes are offered to consumers for making secure purchases on the Internet. There are also some schemes providing digital money, which is stored on smart cards, as a direct substitute for banknotes and coins. Most of these systems are still tested in pilot areas. The development of the payment systems with digitla money offers enormous opportunities, as well es enormous regulatory concerns like money laundering, tax evasion, seigniorage losses.