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Bitcoin and Electronic Money

What is electronic money?

"Bitcoin" and "Electronic Money" are similar concepts, but in reality there are some important distinctions. Below, we will outline some important differences between Bitcoin and electronic money.

Electronic money is a method of settling payments in a specific currency without using bills or coins. Settlement methods include online or contactless payment, which are often used at convenience stores or when paying your train or subway fare.

Many of us have already used this form of payment in our daily lives. Electronic money is convenient and quick, as there is no need to physically take coins or bills out of your wallet.

Bitcoin also has no bills or coins, and enjoys all of the above benefits, such as speed and convenience. In this sense, it is natural to think of Bitcoin as electronic money.

So, is Bitcoin electronic money?

Yes, but Bitcoin is also much more.

Electronic money is typically used as a means of settling payments only within a specific region.

In Japan, for example, electronic money is used in place of JPY bills or coins. Users must deposit yen to their bank account, or add money at electronic terminals.

This is effectively the same as settling the payment in JPY, whether or not physical currency is used.

With Bitcoin, you do not charge your account, or add money at electronic terminals.

To use Bitcoin, you first need to exchange your existing currency, such as JPY, to Bitcoin. Once you have exchanged your money to Bitcoin, you can purchase products with Bitcoin.

Once you have completed your exchange, Bitcoin and electronic currency transactions are similar - you simply make a payment at a shop or website that accepts Bitcoin. Your Bitcoin will be sent to the merchant, and at the same time an equal amount of Bitcoin will be deducted from your digital wallet.

In conclusion, Bitcoin is currency, just like dollars and yen. Electronic money is a system designed to settle payments without using bills and coins. Therefore, crypto assets do not equal electronic money.