What Is a Token? | Cryptocurrency Glossary

Token as a Cryptocurrency

While the term "token" can sometimes refer to coins or chips used for specific services, nowadays it increasingly refers to cryptocurrency.

Unlike fiat currencies such as the yen, cryptocurrencies do not exist in a physical form like coins or paper money. However, using systems built on the internet, they can be used for a wide range of purposes, including sending money to family and friends, making payments for goods and services, and investing by leveraging the price difference between cryptocurrencies and fiat currencies.

Unlike fiat currencies, which are issued and managed by governments or central banks, or electronic money, which has specific issuers or operating entities, cryptocurrencies have no such governing body. They operate through publicly available programs on the internet
, and transactions are facilitated through computer systems and the mutual trust among participants.
Cryptocurrencies are also convertible into fiat currencies, allowing for exchanges such as converting Japanese yen to Bitcoin or Bitcoin to yen.

Furthermore, because the prices of cryptocurrencies fluctuate daily, they are also considered investment assets. As the number of cryptocurrency
users in Japan has grown and the number of service providers has increased, the amended Payment Services Act, which regulates the trading of cryptocurrencies, came into effect on April 1, 2017.