Electronic money is a means of settling payment electronically (through the exchange of data) without the use of paper bills or coins. It is primarily recognized as a means of prepaid payment, with settlement methods ranging from online settlement to contactless settlement, which has become widespread recently. It may be used to pay when boarding trains or when making purchases at a convenience store. Bitcoin is different from electronic money in the following ways:
Management and issuance: Electronic money is issued and is managed by a central source. Bitcoin is not.
New issuance: Electronic money is issued in return for a cash deposit. Bitcoin is issued to Bitcoin miners in return for the cooperative act of mining within the Bitcoin network.
Distribution: Electronic money that is received from one issuer may not be used to pay another issuer without first being converted into cash by the original issuer. Bitcoin that is received may be circulated and used for payment to any party.
System: Electronic money can only be used within the issuing company's network (i.e. a railway company, phone carrier, or retail company). Bitcoin can be used by anyone that is connected to the Internet.