These days, many people are talking about digital currency or digital money. You can easily find a lot of people discussing Bitcoins, cryptocurrencies or about virtual currencies. At the same time, people are wondering about whether the loaned digital currency is functioning as actual money or not. Many people are eagerly looking for the answer to this query.
Before getting on to any conclusion, it is important to find out some details about the entire concept along with its benefits and other features that are making people wondering about its functioning and its future. Just go ahead and read the below discussion.
An Overview of the Concept:
Digital currency is a mode of payment that is not tangible and is present only in electronic form.
It can be transferred between users or entities by using technologies such as the internet, smartphones and the computers. Even though the digital currency is similar to the physical currency, but it allows the user to do instant transactions as well as the borderless transfer of ownership.
The digital currency that is also known as digital money or cybercash is can also be used for purchasing services and goods however it is restricted to some of the online communities like social networks or gaming sites. It has made things easier up to an extent for people.
Underdeveloped Infrastructure and Regulatory Framework:
The concept of digital money is still not widespread. It has an insufficient regulatory framework and user base. At the same time tax treatments of this currency is still in development. The infrastructure that is required for supporting this currency is in its developing phase. Virtual currencies and cryptocurrencies are also categorized as the digital currency.
The digital money is considered as the convenient mode of payment as it can eliminate lengthy process or steps of the process and intermediaries. At the same time, it can also eliminate the infrastructure related to cost evolves in the traditional method of payment that cannot be avoided by banks or cleaning houses. Digital currency also helps in making fund flow more transparent and simple.
It is Beneficial to a Great Extent:
Frankly speaking, digital money has many benefits over physical currency. About benefits of digital money, its first benefit is the ability to making payment on time and easily. Another crucial benefit of digital marketing is lower transaction cost. Another thing that makes digital currency beneficial is its ability to act as transport currency for reducing or eliminating the exposure risks.
It’s too early to Comment:
Even though digital currency has made things much more comfortable, it caters a lot of benefits still it is too early to comment. It is working as actual money to certain extends but not completely. Presently, banks haven’t accepted this concept as a result individual or organizations cannot earn interest on it. Also, it has many risks associated with it like currency volatility, security as well as payment beneficiary identification.
Digital currency has a few areas having uncertainties like customer identification and compliance with regulations along with risk and has restricted its acceptance in the payment industry.