The technology involves the use of computer networks, the Internet and digitally stored value systems. The monetary value is stored electronically on a technical device, which acts as a substitute for physical currency.

The Eagle Cash system was developed by the US military to simplify transactions. It works on the stored value cards system, and can be used anywhere by the military personnel during domestic and overseas postings. This eliminated the problems of handling cash and bank accounts during overseas postings. The user just needs to swipe the card to make purchases from the shops located on the military base. The risks of fraud, corruption, and theft are greatly reduced with the advent of digital cash.

The Octopus Card system is used by the residents of Hong Kong to make payments for their daily transactions. The people of Netherlands make transactions through Chipknip, wherein the user just swipes the card and confirms payment. Chipping has become a universal mode of payment in the Netherlands.

Although digital cash provides many benefits like increased efficiency of transactions, convenience and new business opportunities, it raises local issues such as how to levy taxes, the risk of money laundering wherein illegally obtained funds are disguised as legal, and potential macroeconomic effects such as exchange rate instabilities and shortage of money supply.

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