By Jason Madden
Physical or Electronic Tokens or Commodities that can be have the following properties: Unit of Account defined value Medium of Exchange acceptability Store of Value non-perishable Introduction: What is Money? 2
Narrow View of Term: Tokens of Exchange transacted Only electronically Examples: Facebook Gold, Digital Gold Currency, BitCoin, Terra TRC, and other electronic currencies Broad Usage of Term includes Both: Electronic Payment Authorization Credit cards Value Holding Electronic Tokens What is Electronic Money? 3
Early Intermediary Tokens of Exchange Commodities or Objects of Perceived Worth Minted Coins standardized units of metal Code of Hammurabi: legal debt payment Trade Bills credit certificate for production Led to Local Merchant Banks for redemption Goldsmiths demand deposits & promissory notes Overview: Early Money 4
Private Bank Notes Loans based on deposits on account Beginning of Fractional Banking National Currencies from Central Reserve Banks backed by Gold or Silver Legal Tender for Payments Beginnings of Modern Money 5
World War 1 & End of Gold Standard Scarcity of Gold Reserves with Enlarging Circulation Bank Notes no longer redeemable for gold Floating value in exchange market Money by Decree of Government Backed by issuers ability to repay debts Susceptible to public distrust Possible uncontrolled inflation or deflation Modern Fiat Money 6
Private Currency free banking Community Currency local acceptability World Currency trade reference Hard Currency non-reversible Soft Currency allows payment disputes Types of Electronic Money 7
Free Banking No Central Reserve Bank Free Entry into Banking Industry Freedom to Issue Notes, Accept Deposits, and Collect Checks for Payment Freedom to Borrow Money on Term Deposit Freedom to Lend Money & Invest Assets Bank Secrecy Act of 1970 Informal Value Transfer Systems IVTS required to cooperate in Anti-Money Laundering efforts Patriot Act enforcement 8 Private Currency
Ithaca HOURS Ithaca, NY BerkShares Berkshire, MS Toronto Dollar Toronto, Ontario Community Currency
Global Trade Reference Gold, British Pound, US Dollar, Euro, Yen Private Complementary Currency efforts International Monetary Fund (IMF) Special Drawing Rights (SDR) Supplementary Reserve Assets 10 World Currency
An Open-Source Peer-To-Peer Payment Network Using Digital Signatures & Encryption Public –Private Key Encryption Alice & Bob Illustration Digital Certificate Blocking Chain Video: Example : BitCoin 11
Fees and Limits Monthy Service Charge 2.50 USD ATM Withdrawals 3 USD POS Purchase 3 USD Card to Card Transfer 5 USD Card cash out/Administration Fee 15 USD Maximum ATM Withdrawal USD Maximum Card Balance USD Maximum Daily Spend USD BitCoin Debit/Smart Card
New Frontier for Computer Science involved in the Global Banking Industry Developing strong and secure data exchange Preventing identity theft and forgeries Opportunities in Private & Community Financial Companies Developing Community Currency systems Developing Funding Sources 13 Conclusion
Questions … 14
References A report to the Congress in accordance with section 359 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT ACT). Nov Retrieved from A survey of electronic cash, electronic banking, and internet gaming [electronic resource]. Financial Crimes Enforcement Network, U.S. Dept. of the Treasury, The History of Money (n.d.). Original from PBS Nova broadcast Secrets of Making Money No Risk is Unsafe: Simulated Results on Dependability of Complementary Currencies. Kenji Saito, Eiichi Morino, Jun Murai Retrieved from What are Ithica Hours? (n.d.). Ithica Hours, Inc. Retrieved from What are BerkShares? Currency for the Berkshire Region. (n.d.). BerkShares, Inc.. Retrieved from About The Toronto Dollar. (n.d.). The Toronto Dollar Community Projects Inc. Retrieved from Fees and Limits. (n.d.). Bitcoin Services,LTD. Retrieved from 15