New technology changes money

When the technology of production changes, how does that affect who can be a producer?

Striking → Machinery → Paper → Electronic payments, CBDC, Crypto-assets

Technology and Money in 3 Minutes

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Then

People used to make coins by hammering metal.

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Then

Later, machines started making them.

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Then

And then, paper money was born.

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Now

Now, we have electronic payments.

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Now

Central bank digital currencies and crypto assets have also appeared.

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What's similar

When the technology to make money changes, who can make it also changes.

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What's different

From striking to machines, the key question was authenticity. From electronic to crypto, it's the ledger.

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What to watch out for

Don't mistake new technology for a guarantee of value.

2What would you do?

An acquaintance recommends a new kind of money made with new technology. They say, 'It's safe because it's the latest technology.' How do you respond?

Pick one

If it's the latest technology, it must be safe.

New technology is different from a guarantee of value. Technology has changed the form of money, but the question of who guarantees it always remains.

Ask who guarantees it.

That question has remained through every era. Whether it's struck coins, paper, or crypto, you must check the guarantee separately from the technology.

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Representative Historical Scenarios

Contemporary Financial Scenarios

Situations from the book where this theme appears. We present a comparison with past situations for each case.

What kind of account is a Bank of Japan current account?

1-08 / Modern Money　Present. Tokyo. BOJ-NET.

Similarities: Just as money changers offset debts and credits in each other's ledgers, banks transfer balances among themselves on the Bank of Japan's ledger.
Differences: The counterparty for settlement is not a peer merchant but a central bank whose purpose is defined by law, and transfers are settled one by one on a real-time gross basis.
Applications: When you hear "a bank has money," distinguish whether it is cash in its vault or its current account balance at the Bank of Japan.
Limitations: Interest on current accounts (Complementary Deposit Facility) is handled in the central banking block. The distribution of balances by type of financial institution is not examined.

Where Are Government Bonds Delivered?

4-04 / Government Bonds　1980–. Tokyo. JGB Book-Entry System.

Similarities: The transfers that money changers made in their ledgers to reassign deposits are the same method of transferring rights without moving physical certificates.
Differences: The transfer ledger is held at the central bank, operates with legal authorization, and is conditional upon the settlement of funds.
Applications: When you hear "I bought a government bond," imagine in which account and through which participant it was recorded. There are no physical certificates.
Limitations: Details of the book-entry transfer system for corporate bonds and stocks, and the remaining uses of the government bond registration system, are not covered.

The balance on a transit card: whose liability is it?

8-01 / Digital　Present, Tokyo, Act on Settlement of Funds

Similarities: The form in which value issued by a specific issuer circulates like money within a limited scope is the same as with han-satsu or private notes from shops.
Differences: It is recorded electronically, and the law provides a framework for its definition and protection. The limitation of its scope is determined not by law, but by the issuer's contract.
Applications: When you see a balance, ask three things: who is the issuer, where can it be used, and to what extent is it protected?
Limitations: The standard deposit amount (cabinet order) and the details of protection methods other than deposits (security contracts, trusts) are not covered. The accounting treatment should also be confirmed separately.

Bitcoin: what problem did it solve?

8-02 / Digital　October 31, 2008, Internet

Similarities: The idea of a currency without an issuer overlaps with the memory of an era when silver, weighed on scales, circulated without a state's stamp.
Differences: There is no backing of value by a material. Proof-of-work supports the order of transactions and resistance to tampering, but does not guarantee market value itself. There is no issuer and no liability.
Applications: When you hear "blockchain," distinguish what it solved (order and double-spending) from what it did not solve (value and unit).
Limitations: The current state of prices and mining, and the debate on electricity, are not covered. The BIS's assessment is as of 2025.

Central Bank Digital Currency — Will It Become a Digital Version of Cash?

8-07 / Digital　2020–2026 Tokyo and Frankfurt

Similarities: A state's decision to issue currency in a new material follows the same pattern as the historical shift from copper to paper.
Differences: The material is an electronic record, and the design incorporates payment system requirements such as a two-tier structure, offline capability, and interoperability from the outset.
Applications: When you see news about CBDC, check whether it is retail or wholesale, direct or indirect, and whether a decision to issue has been made.
Limitations: The progress of each country changes daily. This stop is based on the Bank of Japan's 2020 policy and June 2026 report, and the ECB's webpage.

How to compare past and present

Similarities

When the technology of production changes, who can be a producer also changes.

Differences

The shift from striking to machinery was a matter of authenticity; the shift from electronic to crypto is a matter of the ledger.

Applications

Technology may rewrite the definition of money, but the question of its guarantee remains.

Limitations

⚠ When mistaking the novelty of a technology for a source of value.

To go beyond "they are similar," we also describe the differences, what can be applied today, and where past examples should not be applied to the present (limitations).

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