Electronic Money

Definition ∞ Electronic money refers to monetary value stored digitally, representing a claim against the issuer, and accepted as a means of payment by parties other than the issuer. This digital representation of currency facilitates transactions through electronic systems rather than physical cash. It encompasses various forms, including balances on payment apps, prepaid cards, and some stablecoins. Electronic money aims to enhance transaction speed and reduce physical handling costs.
Context ∞ The proliferation of electronic money, including stablecoins, is a significant topic in financial news, prompting discussions about its regulation and potential impact on traditional banking systems. Central banks are evaluating how electronic money influences monetary policy and financial stability. Legislative bodies are considering specific rules to oversee its issuance and transfer, particularly concerning consumer safeguards and market integrity.