The risks of digital currency

The risks of digital currency

Digital currencies would be the currency we use every-day to make purchases in the current fiat system. Digital currency and it’s increasingly being accounted for and traded on the internet, where it can be exchanged.  

When you think of your credit card, debit card, electronic or phone banking have all digitised money such as the rand, dollar, pound, euro, yen or rupee and so forth. This is because a digital currency doesn’t have to be based on encryption. It should be paperless and enable digital transactions. And it should be widely accepted as a form of payment.  

As great as this may all sound it may and can also come with a number of risks that include transactions being affected by fraud or money-laundering. This can make for difficult transactions. 

Also that when you give your credit card to a merchant, you give him or her access to your full credit line, even if the transaction is for a small amount.  

This is because credit cards operate on a “pull” basis, where the store initiates the payment and pulls the designated amount from your account. Also with credit card charge-backs there is a risk of counterfeit or reversed arbitrarily by the sender. 

Digital currencies are also likely to charge high fees when using your debit or credit card due to them being bound by the exchange or interest rates, transactions charges or other charges of any country. Critical concerns and the risks around security of information, payment beneficiary and customer identification have all raised concerns in the marketplace 


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