Even for the same purchase, there are 3 ways to pay: on the spot, later, or in advance.
Banknotes, cards, e-money
Cash, Cards, and Digital Money
Will Cash Disappear?
When is the payment made, and who manages the balance? We will compare new ways to pay.
Time to read the text: about 10 min
The review questions are optional and not included in this time.
What you can read: the course opening and contents are free; the full text is for those who have purchased
After purchase, you can read the full text once your access starts.
Cash, Cards, and Digital Money in 3 Minutes
1See it
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Cards are for paying later. Until the withdrawal date, you owe the card company.
The day you think you paid and the day the money actually moves are different.
E-money is for paying in advance. The money is in the issuer's hands before you even use it.
If the issuer goes bankrupt, you only get back what the law requires.
2025
In Japan, when you look at the amount paid, cards are the top 'non-cash' payment method.
82.7%
Of the total amount of non-cash payments
When you hear 'cash use is down,' check if it's by number of transactions or by total amount.
Don't compare a year where the measurement changed with the year before.
Bitcoin has no issuer. It isn't anyone's debt.
When you're in trouble, there's no one to file a claim with.
A coin pegged to the dollar is a debt of the company that issued it.
It's not the dollar itself, nor is it a bank deposit.
October 2020
The Bank of Japan stated it has no plans to issue a digital currency for now.
However, it is moving forward with preparations just in case.
Before you use it, ask: Whose debt is it? Do I pay now or later? Can it be canceled? Who do I contact with issues?
The form may change, but the questions don't.
2In numbers
82.7%
Japan in 2025. The percentage of credit card payments out of all non-cash payments (by amount).
3What would you do?
You paid with a card at the register. The money will be withdrawn from your account next month. Until then, who do you owe?
Pick one
The store where I shopped
The card company will pay the store later. Your payment to the store is already complete.
The card company
That's right. Until the withdrawal date, you owe the card company. The day you think you paid and the day the money actually moves are different.
The Bank of Japan
The banknotes in your wallet are a debt of the Bank of Japan. Your card payment is a debt to the card company until the withdrawal date.
Do you pay in advance, pay later, or settle it on the spot? Try applying this to the contents of your own wallet.
4Read more
At the checkout, people are lined up: one paying with a banknote, one tapping a card, and one showing a screen. The three are buying the same thing and paying the same amount. But the money is going to three different places.
A banknote is a liability of the Bank of Japan, and the payment is settled on the spot. A card payment will be debited from an account later. Until then, you owe a debt to the card company. The balance on your e-money is a deposit of money you have given to the issuer in advance. If the issuer fails, you will only get back what is stipulated by law.
New ways of paying have appeared many times in the long history of currency. Merchants in Sichuan created deposit receipts to escape from heavy iron coins. The Bank of England was created to lend war funds to the government and issued banknotes. Each time the form changed, the questions were the same. Whose liability is this? Who should I go to when there is a problem?
This course will unravel cards, e-money, crypto-assets, stablecoins, and central bank digital currencies, one by one, with that single question in mind. The numbers are only from materials from the Ministry of Economy, Trade and Industry, the Bank of Japan, the European Central Bank, the Bank of England, and the Bank for International Settlements. We will not predict future prices. Nor will we say which one you should use. The goal is to take home the procedure for what to check before you use something.
What you will understand after this course
- Be able to distinguish between cash in a wallet, bank deposits, cards, electronic money, and crypto-assets based on who holds the liability.
- Be able to interpret a figure for "a decrease in cash" by specifying whether it refers to the number of transactions or the total amount, and what the denominator is.
- Be able to state where one's money is located in cases of prepayment and post-payment.
More about this course
Course number: P7 — Will Cash Disappear?
Supervised by: Mitsuru Hayama
Beyond the text: 6 exercises · 2 coins · 3 readings How reading times are calculated
You will also understand
- Be able to distinguish between what various countries have and have not decided regarding central bank digital currencies.
You can start this course without reading any other course.
Also worth reading, to see the connections (optional)
- How Banks, Interest Rates, and Prices Work
What you learn: Be able to distinguish between the banknotes in one's wallet and one's account balance based on whose liability they represent.
Assessment
6 exercises in this course (4 check, 0 compare, 2 written). Progress is recorded by self-assessment.
The 8 chapters of this course
- Three People at the Register — Classifying Payment Methods by "Whose Liability It Is"There are three ways to pay: settle on the spot, pay later, or pay in advance. First, state whose liability it is.
- Is cash declining? — Check the denominator of the numbers.By number of transactions or by value? What is the denominator? Do not compare a year when the yardstick changed with the previous year.
- Where is the money you paid in advance? — Electronic money and certificates of depositThe money you paid in advance is in the hands of the issuer. Only the amount stipulated by law will be returned.
- Money without an issuer — How Bitcoin worksThere is no issuer. Therefore, it is not anyone's liability, and there is no one to file a claim with if problems arise.
- A Number Tied to the Dollar — Whose Liability Are Stablecoins?Stablecoins are a liability of the issuer. Their backing is verified through disclosure, and they are not recorded on the central bank's books.
- Central Bank Digital Currency — What has been decided, and what has not.Central bank digital currencies are in preparation in many countries, but none have yet decided on issuance. It is important to distinguish between what has been decided and what has not.
- An Introduction to AI and Finance — What Will Get Faster, and What Will RemainAI speeds up the work of finding patterns. Bias, dependence, and herding are described in the same report as new risks.
- What does not change — Five questions to ask before useForms change. The questions do not. Whose liability is it? Is it settled in central bank money? Is it pre-paid or post-paid? Is it reversible? Who is the counterparty?
Readings (3)
- From reconstruction to the palm of the hand Japan from 2024 the register and the offering box
Section 2. 42.8% and 20% of nominal GDP. A scene where the reduced cash and the remaining cash are measured by different figures. - The digital shore United States 2009 Upon the internet
Section 4. The price of currency not belonging to a state continues to be quoted in dollars. How did trade routes position money without an issuer? - The island's choice Britain the present A street corner where cash is vanishing
Section 6. At the end of a 1200-year trade route, an examination of the intangible pound. The conclusion is that what remained were the name and credit.
Read next
Why Do Prices Rise? →What you learn next: You can state, keeping them apart, the two explanations offered for inflation.
Time to read the text: about 8 min ／ What you can read: the course opening and contents are free; the full text is for those who have purchased
Price
After purchase, the full courses, the illustrated books, every country’s story and the numismatics examination are open to you.
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