Crypto rise

gital Money By MITCHELL GRANT Updated September 27, 2021 Reviewed by JULIUS MANSA TABLE OF CONTENTS EXPAND What Is Digital Money? Understanding Digital Money What Problems Does Digital Money Solve? Types of Digital Money Advantages of Digital Money Disadvantages of Digital Money Digital Currency FAQs The Bottom Line What Is Digital Money? Digital money (or digital currency) refers to any means of payment that exists in a purely electronic form. Digital money is not physically tangible like a dollar bill or a coin. It is accounted for and transferred using online systems. One well-known form of digital money is the cryptocurrency Bitcoin. Digital money can also represent fiat currencies, such as dollars or euros. Digital money is exchanged using technologies such as smartphones, credit cards, and online cryptocurrency exchanges. In some cases, it can be converted into physical cash through the use of an ATM. KEY TAKEAWAYS Digital money is money in purely digital form. It is not a physically tangible asset like cash or other commodities like gold or oil. Digital money can streamline the current financial infrastructure, making it cheaper and faster to conduct monetary transactions. It can also ease monetary policy implementation by central banks. Examples of types of digital money are cryptocurrencies, central bank digital currencies, and stablecoins. Digital money is susceptible to hacks and can compromise user privacy.