2524
E-Commerce and Dispute Resolution
documents concerning compromise and reconcili-
ation made through proper out-of-court settlement
procedures.
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ADDITIONAL READING
Basedow, J. (2000). The effects of globalization
on private international law. In Basedow & Kono
(Eds.), /HJDODVSHFWVRIJOREDOL]DWLRQ²&RQÀLFW
of laws, Internet, capital markets and insolvency
in a global economy. Kluwer
Beatty, M. (1999). Litigation in cyberspace: The
current and future state of Internet jurisdiction.
University of Baltimore Intellectual Property
Law Journal, 7, 127.
Bogdan, M. (2006). Concise introduction to EU
private international law. Europa Law Publish-
ing.
Chen, X. (2004). United States and European
Union approaches to Internet jurisdiction and
their impact on e-commerce. University of Penn-
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Chik, W. (2002). U.S. jurisdictional rules of
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and Comparative Law, 10, 243.
Geist, M. (2000). E-commerce jurisdiction: the
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Gillies, L. (2006). The new legal framework for
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H u n t l e y, A . ( 2 0 0 5 ) . C o n t r a c t l a w i n a n e - c o m m e r c e
age. International Journal of Law & Information
Technology, 13, 291.
Jennings, M. (2005). Finding legal certainty for
e-commerce: Traditional personal jurisdiction
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Washburn Law Journal, 44, 381.
Jezairian, S. (2000). Lost in the virtual mall:
Is traditional personal jurisdiction analysis ap-
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DQGHGLVSXWHUHVROXWLRQ,QWKHVKDGRZRI³H%D\
Law.” Ohio State Journal on Dispute Resolution,
15(3), 705.
Kightlinger, M. (2003). A solution to the Yahoo!
problem? The EC e-commerce directive as a
model for international cooperation on Internet
choice of law. Michigan Journal of International
Law, 24, 719.
Nimmer, R. (2001). Principles of contract law
in electronic commerce. In Fletcher, Mistelis, &
Cremona (Eds.), Foundation and perspectives of

international trade law. Sweet & Maxwell.
Pappas, C. (2002). Comparative U.S. and EU ap-
proaches to e-commerce regulation: Jurisdiction,
electronic contracts, electronic signatures and
taxation. Denver Journal of International Law
and Policy, 31, 325.
Stone, P. (2006). EU private international law:
harmonisation of laws. Elgar European Law.
Takahashi, K. (2006). A major reform of Japanese
private international law. Journal of Private In-
ternational Law, 2(2),
2525
E-Commerce and Dispute Resolution
6\PSRVLXP&XUUHQWGHEDWHVLQWKHFRQÀLFWRI
laws: Choice of law and jurisdiction on the In-
ternet: Choice of law for Internet transactions:
The uneasy case for online consumer protection.
(2005). University of Pennsylvania Law Review,
153, 1883.
Symposium on approaching e-commerce through
uniform legislation: Understanding the Uniform
Computer Information Transactions Act and the
Uniform Electronic Transactions Act. (2000).
Duquesne Law Review, 38, 205.
ENDNOTES
1
 7KHZRUGVRIFRQÀLFWRIODZVFRQÀLFWV
law, or private international law are used
as interchangeable terms in this chapter.
2

See generally, K. Boele-Woelki and C. Kes-
sedjian ed., Internet: Which Court Decides?
Which Law Applies? (Kluwer, 1998). Ac-
FRUGLQJWRWKH³,QWURGXFWLRQ´RIWKLVERRN
³>W@KH PDLQ TXHVWLRQ LV ZKHWKHU WKH FKDO-
lenges created by the global information
UHYROXWLRQWRWKHFRQÀLFWVODZ\HUDUHPDWWHUV
of substance or only matters of degree.”
3
In case of computer information transac-
tions like this hypothesis, the object of the
contract is software that is not goods in a
strict sense. One could regard this contract
as a sale contract, and the others as a license
contract.
4
Supreme Court Judgment of Nov. 28, 1975,
Minshu Vol. 29, No. 10, p.1554.
5
Supreme Court Judgments of Oct. 16
,
1981,
Minshu Vol. 35, No, 7, p. 1224 and especially
of Nov. 11, 1997, Minshu Vol. 51, No. 10, p.
4055.
6
Article 4 of the Code of Civil Procedure.
7
Articles 5 of the Code of Civil Procedure.
8

Article 8 (1) of the Act of the Application
of Laws.
9
Article 8 (2) of the Act of the Application
of Laws.
10
Nevertheless, some academics, including
this author, strongly insist that certain
QRQVWDWH OHJDO QRUPV KDYH TXDOL¿FDWLRQV
to be applied directly as the applicable law
through Japanese Private International
Law rules. These norms include at least the
Unidroit Principles, the 1980 UN Conven-
tion on Contracts for the International Sale
of Goods that is not entered into force in
Japan, the Uniform Customs and Practice
for Documentary Credits, and so forth, in
the author’s view. See, 1994 Inter-American
Convention on the Law Applicable to In-
ternational Contracts (Mexico Convention)
adopted by the Organization of American
States. The Proposed Rome I Regulation
also has a similar provision. COM (2005)
¿QDO
11
OJ 16. 1. 2001, L 12/1. The Brussels I Regu-
lation modernizes and replaces the 1968
Brussels Convention on the same matters.
The Brussels Convention continues to apply
i n r e l a t i o n t o D e n m a r k , t o w h i c h t h e B r u s s e l s

I Regulation does not apply. See Article 1
(3) of the Regulation.
12
Article 4 (1) of the Regulation.
13
 3DUDJUDSKRI$UWLFOHUHDGV³$SHUVRQ
domiciled in a Member State may, in another
Member State, be sued:
1. (a) In matters relating to a contract, in
the courts for the place of performance
of the obligation in question;
(b) For the purpose of this provision
and unless otherwise agreed, the place
of performance of the obligation in
question shall be:
- In the case of the sale of goods,
the place in a Member State
where, under the contract, the
goods were delivered or should
have been delivered,
2526
E-Commerce and Dispute Resolution
- In the case of the provision of
services, the place in a Member
State where, under the contract,
the services were provided or
should have been provided,
(c) if subparagraph (b) does not apply
then subparagraph (a) applies.”
14

Paragraphs 1 and 2 of Article 23 state as
follows:
 ³,IWKHSDUWLHVRQHRUPRUHRIZKRP
is domiciled in a Member State, have
agreed that a court or the courts of a
Member State are to have jurisdiction
to settle any disputes which have arisen
or which may arise in connection with a
particular legal relationship, that court
or those courts shall have jurisdiction.
Such jurisdiction shall be exclusive
unless the parties have agreed other-
wise. Such an agreement conferring
jurisdiction shall be either:
a. In writing or evidenced in writ
-
ing
b. In a form which accords with
practices which the parties have
established between themselves
c. In international trade or com
-
merce, in a form which accords
with a usage of which the parties
are or ought to have been aware
and which in such trade or com-
merce is widely known to, and
regularly observed by, parties to
contracts of the type involved in
the particular trade or commerce

concerned.
2. Any communication by electronic
means which provides a durable record
of the agreement shall be equivalent
WR³ZULWLQJ´
15
The most recent consolidated text of the
Convention is found in OJ 30.12.2005 C 334
p.1.
16
 3DUDJUDSKRI$UWLFOHUHDGV³$FRQWUDFW
shall be governed by the law chosen by the
parties. The choice must be expressed or
demonstrated with reasonable certainty by
the terms of the contract or the circumstances
of the case. By their choice the parties can
select the law applicable to the whole or a
part only of the contract.”
17
Paragraphs 1 and 2 of Article 4 state as fol-
lows:
 ³7RWKHH[WHQWWKDWWKHODZDSSOLFDEOH
to the contract has not been chosen in
accordance with Article 3, the contract
shall be governed by the law of the
country with which it is most closely
connected. Nevertheless, a separable
part of the contract which has a closer
connection with another country may
by way of exception be governed by

the law of that other country.
2. Subject to the provisions of paragraph 5
o f t h i s A r t i c l e , i t s h a l l b e p r e s u m e d t h a t
the contract is most closely connected
with the country where the party who
is to effect the performance which is
c h a r a c t e r i s t i c of t h e c o n t r a c t h a s , a t t h e
time of conclusion of the contract, his
habitual residence, or, in the case of a
body corporate or unincorporate, its
central administration. However, if the
contract is entered into in the course
of that party’s trade or profession,
that country shall be the country in
which the principal place of business
is situated or, where under the terms
of the contract the performance is to
be effected through a place of business
other than the principal place of busi-
ness, the country in which that other
place of business is situated.”
18
See Chapter 3 of the Regulation.
19
 6HFWLRQWLWOHG³&2175$&78$/
CHOICE OF FORUM” reads:
2527
E-Commerce and Dispute Resolution
D ³7KHSDUWLHVLQWKHLUDJUHHPHQWPD\
choose an exclusive judicial forum

unless the choice is unreasonable and
unjust.
b. A judicial forum specified in an
agreement is not exclusive unless the
agreement expressly so provides.”
20
 6HFWLRQWLWOHG³&+2,&(2)/$:´
reads:
D ³7KHSDUWLHVLQWKHLUDJUHHPHQWPD\
choose the applicable law. However,
the choice is not enforceable in a con-
sumer contract to the extent it would
vary a rule that may not be varied by
agreement under the law of the juris-
diction whose law would apply under
subsections (b) and (c) in the absence
of the agreement.
b. In the absence of an enforceable agree
-
ment on choice of law, the following
rules determine which jurisdiction’s
law governs in all respects for purposes
of contract law:
1. An access contract or a contract
providing for electronic delivery
of a copy is governed by the law
of the jurisdiction in which the
licensor was located when the
agreement was entered into.
2. A consumer contract that requires

delivery of a copy on a tangible
m e d i u m i s g o ve r n e d b y t h e l a w o f
the jurisdiction in which the copy
is or should have been delivered
to the consumer.
3. In all other cases, the contract
is governed by the law of the
jurisdiction having the most
VLJQL¿FDQWUHODWLRQVKLSWRWKH
transaction.
c. In cases governed by subsection (b),
if the jurisdiction whose law governs
is outside the United States, the law of
that jurisdiction gover ns only if it pro-
vides substantially similar protections
and rights to a party not located in that
jurisdiction as are provided under this
[Act]. Otherwise, the law of the State
WKDWKDVWKHPRVWVLJQL¿FDQWUHODWLRQ-
ship to the transaction governs.
d. For purposes of this section, a party
is located at its place of business if it
has one place of business, at its chief
H[HFXWLYH RI¿FH LI LW KDV PRUH WKDQ
one place of business, or at its place of
incorporation or primary registration
if it does not have a physical place of
business. Otherwise, a party is located
at its primary residence.”
21

New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards
of June 10, 1958.
22
As to the theory of special circumstances,
see above II 1 (1).
23
Article 15 reads:
 ³,QPDWWHUVUHODWLQJWRDFRQWUDFWFRQ
-
cluded by a person, the consumer, for
a purpose which can be regarded as
being outside his trade or profession,
j u r i s d i c t i o n s h a l l b e d e t e r m i n e d b y t h i s
Section, without prejudice to Article
4 and point 5 of Article 5, if:
a . I t i s a c o n t r a c t f o r t h e s a l e o f g o o d s
on installment credit terms; or
b. It is a contract for a loan repayable
by installments, or for any other
IRUPRIFUHGLWPDGHWR¿QDQFH
the sale of goods; or
c. In all other cases, the contract
has been concluded with a per-
son who pursues commercial
or professional activities in the
Member State of the consumer’s
domicile or, by any means,
directs such activities to that
Member State or to several States

2528
E-Commerce and Dispute Resolution
including that Member State, and
the contract falls within the scope
of such activities.
2. Where a consumer enters into a con
-
tract with a party who is not domiciled
in the Member State but has a branch,
agency or other establishment in one of
the Member States, that party shall, in
disputes arising out of the operations
of the branch, agency or establish-
ment, be deemed to be domiciled in
that State.
3. This Section shall not apply to a con
-
tract of transport other than a contract
which, for an inclusive price, provides
for a combination of travel and accom-
modation.”
24
See especially, Paragraph 1(c) of Article
15.
25
 3DUDJUDSK  RI $UWLFOH  WLWOHG ³&HUWDLQ
consumer contracts” states as follows;
1. This Article applies to a contract the
o b j e c t o f w h i c h i s t h e s u p p l y o f g o o d s o r
VHUYLFHVWRDSHUVRQ³WKHFRQVXPHU´

for a purpose which can be regarded as
being outside his trade or profession,
or a contract for the provision of credit
for that object.
26
 $UWLFOHWLWOHG³0DQGDWRU\UXOHV´UHDGV
 ³:KHQDSSO\LQJXQGHUWKLV&RQYHQ
-
tion the law of a country, effect may
be given to the mandatory rules of the
law of another country with which the
situation has a close connection, if and
in so far as, under the law of the latter
country, those rules must be applied
whatever the law applicable to the
contract. In considering whether to
give effect to these mandatory rules,
regard shall be had to their nature and
purpose and to the consequences of
their application or non-application.
2. Nothing in this Convention shall
restrict the application of the rules
of the law of the forum in a situation
where they are mandatory irrespective
of the law otherwise applicable to the
contract.”
27
See mentioned Section 109.
28
See for example, Zippo Manufacturing

Company v. Zippo Dot Com, Inc., 952 F.
Supp. 1119 (W.D. Pa. 1997), which is not a
consumer contract case.
29
OJ 17.7.2000 L 178/1.
30
COMMISSION RECOMMENDATION of
30 March 1998 on the principles applicable
to the bodies responsible for out-of-court
settlement of consumer disputes, OJ 17.4.98,
L 115/31 and COMMISSION RECOM-
MENDATION of 4 April 2001 on the prin-
ciples for out-of-court bodies involved in the
consensual resolution of consumer disputes,
OJ 19.4.2001, L 109/56. As a world-wide
project, see the UNCITRAL Model Law on
International Commercial Conciliation.
31
Commission Working Document on the
creation of an Extra-Judicial Network (EEJ-
Net), SEC (2000) 405.
32
 ³9,',6387(5(62/87,21$1'5(-
'5(66´ ³$ $33/,&$%/( /$: $1'
JURISDICTION” of Part 2 of the Guidelines
states as follows;
 ³%XVLQHVVWRFRQVXPHUFURVVERUGHUWUDQV
-
actions, whether carried out electronically
or otherwise, are subject to the existing

framework on applicable law and jurisdic-
tion.
Electronic commerce poses challenges to
this existing framework. Therefore, con-
sideration should be given to whether the
existing framework for applicable law and
MXULVGLFWLRQVKRXOGEHPRGL¿HGRUDSSOLHG
differently, to ensure effective and transpar-
ent consumer protection in the context of the
continued growth of electronic commerce.
In considering whether to modify the exist
-
ing framework, governments should seek
to ensure that the framework provides fair-
2529
E-Commerce and Dispute Resolution
ness to consumers and business, facilitates
electronic commerce, results in consumers
having a level of protection not less than that
afforded in other forms of commerce, and
p r o v i d e s c o n s u m e r s w i t h m e a n i n g f u l a c c e s s
to fair and timely dispute resolution and
redress without undue cost or burden.”
This work was previously published in Cyberlaw for Global E-business: Finance, Payments, and Dispute Resolution, edited
by T. Kubota, pp. 239-254, copyright 2008 by Information Science Reference (an imprint of IGI Global).
2530
Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited.
Chapter 8.11
The Regulation of New Forms
of Electronic Fund Transfers in

Japan Focusing on
Electronic Money
Takashi Nakazaki
1
Anderson Mori & Tomotsune, Japan
ABSTRACT
In this chapter, after surveying existing Japanese
public laws that regulate the transfer of funds via
the Internet, and focusing on electronic money in
particular, It will be discussed how these existing
regulations may apply to new electronic payment
methods that may not have been accounted for
when these regulations were established, whether
WKHUHJXODWLRQVDUHVXI¿FLHQWWRERWKSURYLGHFRQ-
venience to the user and protect their safety, and
whether these regulations are desirable as busi-
ness conditions for developing electronic money.
Through these discussions, certain objectives
will be developed, which should be taken into
account when developing regulations in Japan
on the transfer of funds via the Internet. Also,
this chapter discusses anti-money laundering
regulations applicable to transfers of funds on
the Internet, focusing on electronic money, and
will examine how Japanese money laundering
regulations may apply to cross-border transfers of
funds using overseas electronic money services.
Through this examination, the chapter will at-
tempt to suggest desirable money laundering
regulations on domestic electronic money in the

near future. Furthermore, this chapter discusses
real money trade and point-rewarded programs in
v ie w of f u n c t io n o f p ay m e n t o r t r a n sf e r r i n g f u n d s
electronically in extended research sections, and
closes by predicting future research directions.
INTRODUCTION: WHY ELECTRONIC
MONEY NOW?
Electronic Money has Increasingly
become a Part of Personal Lives in
Japan
The use of Electronic Money has been expanded
in Japan in recent years, and it has come to be
2531
The Regulation of New Forms of Electronic Fund Transfers in Japan Focusing on Electronic Money
used transactions in various goods and services.
As the commercial online transactions quickly
spread among general consumers, the necessity
for establishing electronic payment methods has
increased. Also, as the domestic player population
of online games continues to expand, intermediate
agents on the Internet specialized for Real Money
7UDGLQJ KHUHLQDIWHU UHIHUUHG WR DV ³507´
meaning the exchange of virtual currency within
online games with the currency of the real world,
has also appeared. Meanwhile, in the real world,
in order to avoid the time and effort involved in
using cash at vending machines, convenience
stores, and so forth, IC chips that act as Electronic
Money devices have been introduced. IC chips
working as Electronic Money have become a

standard function of cellular phones and cellular
phones themselves, which are widely used by the
Japanese, have an Electronic Money function.
The integration of IC chips into cellular phones
brought about an increase in the number of users
of Electronic Money. Moreover, it did not stop
o n l y a t t r a n s a c t i o n s w i t h e n t r e p r e n e u r s s u p p l y i n g
goods and service, also allowed users to transfer
the electronic value recorded on IC chip to each
other. In addition, the number of shops that ac-
cept Electronic Money from existing Electronic
Money issuers has increased rapidly, thanks to
associations with other issuers. Furthermore,
large-sized mass home electronics retailers and
airline companies have started a service which
converts points and mileage into Electronic Money
issued by other entities.
How has the Japanese Government
Responded to the Spread of
Electronic Money?
As a social phenomenon, Electronic Money has
started to spread to general consumers, rather
WKDQPHUHO\EHLQJFRQ¿QHGWRVSHFLDOXVHJURXSV
Therefore, the introduction of legislation regulating
Electronic Money in order to protect consumers has
b e c o m e i n c r e a s i n g l y u r g e n t . F r o m t h e 19 9 0 s , m e m -
bers of the Japanese government have frequently
advocated the introduction of full-scale legislation
on Electronic Money and have issued research
reports. Although these reports are available to the

public, since Electronic Money has not yet become
fully widespread, the legislation which covers Elec-
tronic Money widely has not yet been established.
In this situation, the Working Group on Information
Technology Innovations and Financial Systems
KHUHLQDIWHUUHIHUUHGWRDVWKH³:RUNLQJ*URXS´
under the Sectional Committee on Financial Sys-
tem of the Financial System Council of Financial
Services Agency (FSA) has held several hearings
from providers of prepaid-type electronic payment
services, focusing on the detailed content of their
services and their safety measures. The Working
Group released a memorandum from the chairman
23
)6$  WKH ³&KDLUPDQ 0HPRUDQGXP´ WR
WKHSXEOLFHQWLWOHG³,VVXHVIDFLQJWKH'HYHORSPHQW
of New Electronic Payment Services” in April,
2006. The Chairman Memorandum is primarily
a summary of: (1) matters to be considered by
service providers and (2) issues to be studied by
the government in the future.
However, the Chairman Memorandum covers
only prepaid-type electronic payment services,
VXPPDUL]HGDQGFDWHJRUL]HGLQWR³HOHFWURQLFSD\-
PHQWVHUYLFHVXVLQJ,&FKLSV´DQG³HOHFWURQLFSD\-
ment services over the Internet” and does not cover
the newest forms of electronic funds transfer, such
as point cards or air miles. Moreover, the Working
Group approached the matter mainly from the view
point of how to raise the reliability of prepaid-type

electronic services through more stable payments
and stronger user protection, not from the view point
of the right to issue currency only being permitted
E\WKHQDWLRQ¿QDQFLDOSROLF\DQGEDODQFLQJZLWK
strict regulations on banks.
The Aim of this Chapter
In this chapter, after surveying existing Japanese
public laws that regulate the transfer of funds via
the Internet, and focusing on Electronic Money in
2532
The Regulation of New Forms of Electronic Fund Transfers in Japan Focusing on Electronic Money
particular, it will be discussed how these existing
regulations may apply to new electronic payment
methods that may not have been accounted for
when these regulations were established, whether
WKHUHJXODWLRQVDUHVXI¿FLHQWWRERWK DSURYLGH
convenience to the user and protect their safety,
and whether these regulations are desirable as
business conditions for developing Electronic
Money. Through these discussions, certain objec-
tives will be developed, which should be taken
into account when developing regulations in Japan
on the transfer of funds via the Internet.
Also, this chapter discusses anti-money
laundering regulations applicable to transfers
of funds on the Internet, focusing on Electronic
Money, and will examine how Japanese money
laundering regulations may apply to cross-bor-
der transfers of funds using overseas Electronic
Money services. Through this examination, this

chapter will attempt to suggest desirable money
laundering regulations on domestic Electronic
Money in the near future.
Lastly, the extended research sections discuss
real money trade and point-rewarded programs,
focusing on the use of such services to make pay-
PHQWVRUWUDQVIHUIXQGVHOHFWURQLFDOO\DQGWKH¿QDO
section predicts future research directions.
WHAT IS “ELECTRONIC MONEY”?
Discussions So Far
When considering regulations on Electronic Money,
LWLVQHFHVVDU\¿UVWWRFOHDUO\LGHQWLI\WKHVXEMHFWRI
the regulations. The common understanding of the
WHUP³(OHFWURQLF0RQH\´YDULHVZLGHO\LQ-DSDQ
One view insists that Electronic Money means
electronic payment methods or general payment
methods using advanced information communi-
cation technology. The other view claims that the
Electronic Money means the electronic data itself
which has monetary value. By way of illustration,
the understandings of Electronic Money indicated in
WKHWZRUHSRUWVLVVXHGE\WKH¿UVW
4
and the second
5
(June 1998) round-table conferences on the theme
RI(OHFWURQLF0RQH\DUHYHU\GLIIHUHQW7KH¿UVW
report divides the digitalization of payment services
into 1) the means of payment and 2) the method
RISD\PHQW,QWKLVFRQWH[W³PHDQVRISD\PHQW´

means the instruments that have monetary value,
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PHFKDQLVPVIRUWUDQVIHUULQJ³PHDQVRISD\PHQW´
such as payment by debit card and wire transfers
XVLQJ RQOLQH EDQNLQJ 7KH ¿UVW UHSRUW GH¿QHV
Electronic Money quite narrowly, as electronic data
itself having monetary value within the category
RI³PHDQVRISD\PHQW´7KHVHFRQGUHSRUWRQWKH
other hand, explains that Electronic Money is a
payment mechanism performed by the transfer
or updating of an electronic record issued cor-
responding to funds provided prior to issuance, or
the electromagnetic record itself. In summary, the
second report assumes that the meaning of Elec-
t r o n i c M o n e y v a r i e s f r o m e l e c t r o n i c d a t a t o m e t h o d
of payment, depending on the context. In revising
the 1998 Foreign Exchange and Foreign Trade Law
(Gaikokukawase oyobi Gaikokubouekihou,Law
1RRIDVDPHQGHGWKH³)(/´LWLQWHQGV
to include both electronic payment services using
IC-chip-embedded devices, such as IC cards and
PRELOHSKRQHVKHUHLQDIWHUUHIHUUHGWRDV³,&FKLS
type service”) and electronic payment services in
which electronic value data is centrally managed
solely on the service provider’s server (hereinafter
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WKHVDLGODZDQGVHWVRXWWKHGH¿QLWLRQVLQWKH)(/
accordingly.
6

The FEL is the only piece of legisla-
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GH¿QLWLRQVZHUHKRZHYHUFUHDWHGLQWKHFRQWH[W
of the FEL, and are only used in this article for
reference purposes.
The Chairman Memorandum does not use
WKHWHUP(OHFWURQLF0RQH\EXWXVHV³(OHFWURQLF
Payment Services” instead. This seems to try
to clarify the subject of prospective regulations
in the near future, by excluding the vague and
2533
The Regulation of New Forms of Electronic Fund Transfers in Japan Focusing on Electronic Money
multiple meanings corresponding to the term
Electronic Money.
Position of this Article on How to
Analyze the Term Electronic Money
Although the expression Electronic Money is
used in this chapter, it is not realistic to pursue a
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GH¿QLWLRQKDVORQJEHHQGHEDWHGDQGUHPDLQV
controversial.
In order to determine how increasingly preva-
lent Electronic Money transactions should be
regulated, it would be useful to determine and
analyze the core elements of Electronic Money
that are common to all understandings of the term.
In the following section, such core elements will
EHGLVFXVVHGDIWHUSURYLGLQJDORRVHGH¿QLWLRQ
of the concept of Electronic Money.
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Chapter
What Range Should Electronic Money
Cover?
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SD\PHQW´RULQFOXGHERWK³PHDQVRISD\PHQW´DQG
³PHWKRGVRISD\PHQW´")RUWKHSXUSRVHVRIWKLV
FKDSWHU³PHWKRGVRISD\PHQW´ LQWKHGH¿QLWLRQ
of Electronic Money will not be included because
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and credit payments through the Internet have be-
come widely used in Japan, and have already been
thoroughly discussed; it would be unnecessary to
argue further that they should be regulated. Once
we assume that Electronic Money does not include
³PHWKRGVRISD\PHQW´WKHQH[WTXHVWLRQLVZKHWKHU
Electronic Money is limited to data having monetary
value in and of itself, or in addition, whether it should
include a payment scheme using electronic means
of payment, that is, data with monetary value. A
payment scheme using electronic means of payment
differs from electronic methods of payment using
non-electronic means of payment insofar as in the
former system, users directly control the data with
monetary value. Users of electronic methods of
payment using non-electronic means of payment
may only give instructions to the entities actually
controlling the non-electronic means of payment,
such as cash, that is, banks and credit card com-
panies. Even if the meaning of Electronic Money
is limited to data having monetary value in and

of itself, it cannot be determined how Electronic
Money transactions should be regulated without
also analyzing the effect of payment by transfer-
ring such data.
Does Electronic Money Need
Versatility?
Whether it is necessary for Electronic Money
to be versatile is arguable. The opinion of the
author is that it is unnecessary. Whether Elec-
tronic Money needs versatility, namely, whether
payment by Electronic Money should be a perfect
substitute for payment using cash currency, is
primarily a political and theoretical issue, and is
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VRFLDOSKHQRPHQRQ%\³DSROLWLFDODQGWKHRUHWL-
cal argument,” it is meant that Electronic Money
functioning as a perfect alternative for cash cur-
rency will infringe the exclusive right of nations
t o i s s u e c u r r e n c y, o r c o n t r a v e n e c u r r e n c y l a w s a n d
regulations. However, making Electronic Money
absolutely equivalent to cash by endowing it with
versatility and cashability has been the aspiration
of Electronic Money advocates. In addition, as a
social phenomenon, some of the existing payment
services which may be used only for purchasing
certain goods or services tend to be versatile to
some extent, through the relationship between
VHUYLFHSURYLGHUV7KLVWHQGHQF\PDNHVLWGLI¿FXOW
to draw a line regarding versatility.
Core Elements of Electronic Money

The three core elements which are generally