Electronic money facts for kids

Electronic money is a way to pay for things using digital systems instead of physical cash. It's like having money on a special card or even your phone! You use a technical device, like a smart card, to spend it. If your electronic money is on a card, you might use a secret PIN code to keep it safe.

Electronic Money in Japan

In Japan, electronic money is very popular, especially for train tickets. For example, JR East has a prepaid train ticket called Suica. JR West uses a similar card called ICOCA. Both Suica and ICOCA are plastic cards with a tiny computer chip inside. Suica was first used in 2001.

Many other types of electronic money are used at train stations across Japan. For instance, Kitaca is used in the Hokkaido area. Sugoca is used in the Kyushu area. Most electronic money in Japan can also be used to buy things at convenience stores.

In 2004, a company called NTT DoCoMo launched a mobile phone that could act like an electronic money card. Today, many people in Japan use these kinds of electronic money cards and phone apps.

How Electronic Money Works

It's important to know that electronic money is always backed by real money. This means that for every digital coin or credit you have, there's actual money in a bank account somewhere. Because of this, things like cryptocurrencies (like Bitcoin) are not considered electronic money. Cryptocurrencies are different because they are not usually backed by a central bank or real-world money in the same way.

Images for kids

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  Taxonomy of money, based on "Central bank cryptocurrencies" by Morten Linnemann Bech and Rodney Garratt

See also

In Spanish: Moneda digital para niños