EGeld

EGeld is a term used to describe an electronic form of money intended for digital payments. It is stored electronically and can be transferred between users and merchants that accept EGeld. In practice, EGeld can be issued by a central authority as a central bank digital currency (CBDC) or by licensed financial institutions as private electronic money.

Typical implementations involve a digital wallet, stored on a mobile device, computer, or hardware token. Transactions may be processed over payment networks or clearing systems, and depending on the design, EGeld can be token-based or account-based. Strong cryptographic protections and secure authentication are commonly used to prevent fraud and protect user data, while measures against double-spending are integrated into the settlement layer.

Regulation and safeguarding: Electronic money products are generally subject to financial regulation. Issuers usually require licensing, consumer protection rules, and anti-money-laundering controls. Funds held as EGeld are typically segregated from the issuer’s own assets and are loaned or invested only within permitted limits, with schemes to recover user funds in case of insolvency.

Use cases and considerations: EGeld can enable faster cross-border payments, micropayments, and offline transactions in some designs. Proponents highlight efficiency and financial inclusion, while critics emphasize privacy trade-offs, concentration risk, and regulatory complexity. The specific features of EGeld depend on the issuing framework and technology used.

See also: electronic money, digital wallet, central bank digital currency, fintech.