Definition ∞ A digital cash system enables electronic transfers of value that mimic the properties of physical cash, offering immediate settlement and often anonymity or pseudonymity. These systems typically operate outside traditional banking infrastructure, utilizing cryptographic techniques to secure transactions and verify ownership. They facilitate direct peer-to-peer payments without requiring intermediaries. The design prioritizes efficiency, privacy, and resistance to censorship.
Context ∞ The pursuit of effective digital cash systems remains a central theme in the cryptocurrency domain, with projects continuously developing new protocols to achieve scalable and private electronic payments. Central bank digital currencies (CBDCs) also explore digital cash concepts, albeit within a centralized framework, aiming to modernize payment infrastructure. The ongoing debate concerns balancing privacy features with regulatory demands for anti-money laundering and financial surveillance.
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