To word this passage exceedingly clearly, propitiation essentially means “satisfactory payment.” To paraphrase, the verse then reads, “he is the satisfactory payment for our sins: and not for our's only, but also for the sins of the whole world.” Christ is our advocate in the heavenly places, as the first verse tells us; He stands before God as the One who pleads for His saints when we sin.
John presses the point home to declare that Jesus is the propitiation (satisfactory payment) for our sins. As I stated for the verse prior, when our Lord pleads on our behalf regarding His ransomed saints He pleads His own merit, His own worth. He is our sin payment. His presence before the Father is an eternal reminder that what was accomplished at Cavalry was done eternally, and it was done perfectly and completely. There is no more offering for sin, Hebrews 9:24-26; 10:10-14.
Jesus is not only the payment for sins on behalf of the saints (i.e. on behalf of those who through faith became His) but for the sins of the whole world. There are several possible explanations for this portion of the verse. It depends upon how one views the phrase “whole world” in the context of John’s writing. In Acts 17:6 we find the term “world” defining the populated Roman world of Paul’s day. Clearly that cannot be what the passage means. The word has been transliterated by some to mean “the world of the elect.” This creates severe exegetical problems, because then you are left attempting to sift through the passage in an effort to determine who the former portion of the verse addresses. John uses the pronoun “our” in his first reference of Christ being the payment for sins. He then expounds on this concept and wraps the term around the “whole world.”