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Second, payment with e-money may not be anonymous since the third party obligor may keep a record of each transfer. On one hand it’s a true problem of e-cash; on the other hand, they believe historically, the transition from coins to paper money involved a degree of loss of anonymity, since individual banknotes may be identified by number and recorded by a party to a payment transaction. Furthermore, loss of anonymity may not be substantial in the “offline unaccountable” systems. Finally, as technology advance, anonymous may further be eroded even with regard to payment in paper money.
Third, for each e-money product to be “money”, the stored or loaded value must be a universal medium of exchange, as measured by wide acceptance among creditors. Actually, this question is considered to be a rather important issue, that is, the payment system confidence. The payment system confidence not only includes the liability on the e-money can be met, but also relates to the payment method itself. Government try to achieve the first confidence by qualify the issuers. For example, article 4 of the EMI Directive requires e-money institutions to have an initial capital of not less than EUR 1 million and at all times own funds which are equal to or above 2% of ‘the higher of the current amount or the average of the preceding six months’ total amount of their financial liabilities relating to outstanding e-money’. To achieve the second one, is a real complicate problem, since it ties up the development of technology itself, such as, the safety of transaction systems and the ability to prevent counterfeiting. The degree of acceptability of each e-money product in the market place is a question, not always easily ascertainable.
Fourthly, e-money may be created other than withdrawal from a reservable deposit with a commercial bank so as to undermine the government and central bank’s hold on monetary policy. This objection is based on the thesis that e-money will weaken the operations of the government and central bank from markets in which financial claims are created and transacted. First, loss of seigniorage is perhaps the most serious damage that could inflict on government prerogative. E-money, like the traveler’s cheque has the effect of redirecting seigniorage from government to private companies. Take an example, “in 1994 alone, the aggregate value of the interest-free loan extended by all such holders to the government was nearly twenty billion dollars”. Second, e-money might easily affect the operations of government and central bank’s monetary policy, because e-money issued by uncertain private companies, which makes central bank too difficult to make sure of the exact amount of currency in circulation. This point is so important that lots of arguments emerged, which focus on the issuers of e-money, should the e-money be issued by private companies or by government? In practice, the Working Group on European Union Payment Systems recommend that only “credit institutions”, that is, those institutions that are supervised by central banks or other authorities, should be permitted to issue smart cards. Based on the present U.S law, there is no law to forbid that private company to issue e-money. It is remarkable of Professor Hayek’s view, he believed that “a free market in currencies would not only curb inflation, misdirection of production, and other economic woes, but also would curtail the growth of centralized government”, the government could “lose much of its vast power to tax and spend, inflate, impoverish, and manipulate”. Nevertheless, these impacts might happen in all non-cash payment systems, and will not undermine the nature of e-money as “money”.
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