The issuance and use of electronic money
Electronic money is a precise object, defined by financial regulation. This article sets out its vocabulary, its actors and its circuit, so that the pages of this site can be read without ambiguity.
Definition. Electronic money is monetary value stored in electronic form, issued on receipt of funds, and accepted as a means of payment by persons other than its issuer. Three elements are therefore required: funds received, value issued, and acceptance by third parties.
What it is not. It is not a bank deposit: it bears no interest and is not covered by a deposit guarantee scheme. Nor is it money created by a central bank.
The actors
| Actor | Role |
|---|---|
| Issuer | The institution authorised to issue electronic money on receipt of funds. |
| Distributor | Where applicable, the party that distributes electronic money on behalf of the issuer. |
| Holder | The party that holds the value issued and has a right to redemption. |
| Recipient | The party that accepts electronic money in payment for a good or a service. |
| Supervisory authority | The authority that authorises the institution and supervises its activity. |
The circuit, step by step
Handover of funds
Funds in euros are handed over to the issuer. Nothing is issued without this handover.
Issuance
The issuer creates electronic money up to the amount of the funds received.
Use
The holder uses it with recipients who accept it.
Redemption
The holder can obtain conversion into euros, under the conditions provided for.
Why the funds received are treated separately
The funds handed over in exchange for issuance are not the institution’s operating funds. Regulation requires safeguarding methods intended to preserve them; this mechanism is distinct from a deposit guarantee and does not have the same effects. The arrangement adopted by an institution is set out in its documentation.
What authorisation means
An authorisation certifies that an institution is permitted to carry out a defined activity and that it is subject to the supervision of its authority. This examination covers in particular governance, risk management and the safeguarding of funds. Authorisation is neither a State guarantee nor a commercial endorsement by the authority.
General explainer. Last reviewed: 8 September 2026. It describes the framework applicable to electronic money and does not replace the documentation of a particular scheme. For MAP’s scheme, see Regulatory framework.