Question

Credit cards are not considered as money even though people have been using them like money for many years. Explain. What is/are the difference(s) between a debit card and a credit card. Give relevant example(s) in Hong Kong. If you pay in virtual currencies such as bitcoin, do you think it is regarded as money according to traditional definitions?

Answer 1

Credit card vs Debit card

• Debit cards are directly linked to checking or savings account while credit cards are a line of credit offered by bank
• Credit cards are issued if customers qualify for a minimum credit score as offered by the CRA s. While debit cards are issued to all customers holding account.
• Maximum limitof credit card is the highest credit limit offered. While debit cards can be used based on balance available with account
• Credit card offers better customer protection and charge higher fees than debit cards

Citing as an example a customer may purchase from a ecommerce platform in HK by paying in bitcoin.

In general, Hong Kong does not prevent quasi-SF Virtual Assets from being owned or exchanged, as Bitcoins and related currencies are treated as virtual goods and not electronic currency, given that cryptocurrencies are owned and exchanged in good faith.

However it is not regarded as money as per traditional definition.

• Traditional money like HKD is backed by central government while crypto currency like bitcoin are not backed by any government.
• HKD has physical existence while Bitcoin s don't have any existence as they are only mined hash codes.
• Value of crypto depends only on exchange rates of unregulated exchanges.

Thanks :)