Electronic money

Francis Davey fjmd1a at gmail.com
Mon Dec 1 21:40:24 GMT 2014

Apologies if this seems like a very stupid question (or series of
questions) but this list struck me as being the best place to ask it.

I'm doing some writing/teaching about legal aspects of money and payment
systems on the internet (as a more general part of e-commerce). I'm trying
to get my head around what systems of "electronic money" there are out
there. Most of what I read is too sales-oriented for me to tell what is
actually going on.

Specifically I am interested in knowing if there are any systems of open
circulation "electronic money" that don't involve smart cards or similar
physical tokens.

By "electronic money" I mean specifically money that is a liability on the
issuer. I.e. there is an issuer and if you present your "copy" of the
electronic money the issuer must present (or will present) you with some
currency issued (say) by a sovereign state.

By "open circulation", I mean one that allows parties to transfer the money
between them without reference to the issuer or some other central body.

Mondex was, as I understand it, an example of such a form of open
circulation electronic money but relied on a physical token to make sure
there was no double spending (forgive me if I have misunderstood this

NB: please no criticism of whether it actually achieved these goals :-).

Clearly cryptocurrencies openly circulate but they aren't "electronic
money" (*) because they don't represent a liability on anyone.

Are there any examples of such things, or are all "electronic money"
systems essentially reliant on smart cards or references back to an issuer?

Ultimately I am trying to work out whether there is anything new (from a
legal perspective).

(*) There's a directive on "electronic money" and being a liability on the
issuer is an essential (though not only) part of being electronic money.
Bitcoin is not "electronic money" in that sense and so doesn't fall within
all the regulatory rules of the same.

Francis Davey
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