The Distinction and Controversy of Digital Currency in China

Abstract

This paper pointed out the main difference between digital currency and the other two currencies, by clarifying and comparing the concepts of electronic money, virtual currency and digital currency. Starting from the basic characteristics of digital currency, two controversial issues were reviewed and discussed, i.e. whether digital currency is trustworthy and will it become a real currency. Analysis indicates that the prospect of digital currency as a disruptive innovation should not be underestimated, but its healthy development cannot be guaranteed without recognition of the government and protection of laws, as well as compromising and integrating innovation with traditional financial system. Finally, the paper pointed out the current research directions of digital currency. Keywords-digital currency; electronic money; virtual currency;