Electronic Currency which is also known by several names such as electronic cash, e-money, digital money, digital cash or digital currency refers to money which is exchanged only electronically. It involves the use of a computer network, the internet and a digital stored value system. Among the examples of electronic currency includes Electronic Funds Transfer (EFT) and direct deposit.

An example of electronic currency uses is Hong Kong's Octopus card system, which started with the purpose of transit payment system and has evolved into a widely used electronic cash system. Electronic currency acts as a “virtual wallet” where you are able to use it to make payments as long as there is still balance and as long as it is accepted in the place of purchase. Some electronic currency allows one to transact even if the user has no balance remaining. The charges incurred will be billed to the user at the end of every month. Over the years, several companies have set up businesses offering electronic currency. DigiCash Inc. is the first company to offer electronic currency.

DigiCash Inc. is the pioneer of electronic currency. DigiCash Corporation was founded by David Chaum in 1990. DigiCash transactions were unique in its way that they were anonymous due to a number cryptographic protocols developed by its founder. The brand new company sold a smart card for closed systems which was an instant success for a few years. The smart cards during that period were said to be technically secure to conduct a transaction on the Internet while maintaining integrity of data and also allows the user to remain anonymous.

However, DigiCash declared bankruptcy in 1998, and subsequently sold its assets to eCash Technologies, another digital currency company. One of the factors to DigiCash’s downfall is due to the fact that the use of digital cash has been relatively low-scale during those times and even up till today. The fall of DigiCash led to the rise and fall of several other companies offering similar services such as Flooz.com.