  We describe challenges in the risk management of smart card based electronic
cash industry and describe a method to evaluate the effectiveness of
distributed intelligence on the smart card. More specifically, we discuss the
evaluation of distributed intelligence function called "on-chip risk
management" of the smart card for the global electronic cash payment
application using micro dynamic simulation. Handling of uncertainty related to
future economic environment, various potential counterfeit attack scenarios,
requires simulation of such environment to evaluate on-chip performance.
Creation of realistic simulation of electronic cash economy, transaction
environment, consumers, merchants, banks are challenge themselves. In addition,
we shows examples of detection capability of off-chip, host based counterfeit
detection systems based on the micro dynamic simulation model generated data
set.
