Japan Inc to begin experiments issuing digital yen

According to Reuters, Japan Inc to begin experiments issuing digital yen.

TOKYO (Reuters) – More than 30 major Japanese companies will begin experiments next year to issue a common, private digital currency to advance digitization in one of the world’s most money-loving countries, the organizing body said. group Thursday.

The move follows the Bank of Japan’s recently announced plan to experiment with the issuance of a digital yen, underscoring a growing awareness of the need for Japan to catch up with rapid global advances in financial technology.

The group, comprising Japan’s three largest banks, as well as brokers, telecommunications companies, utilities and retailers, will conduct experiments to issue a digital currency that will use a common settlement platform.

“Japan has many digital platforms, none of which are big enough to beat cash payments,” Hiromi Yamaoka, a former BOJ director who chairs the group, told an online briefing.

“We don’t want to create another silo-like platform. What we want to do is create a framework that can make different platforms compatible with each other, ”said Yamaoka.

Private banks will be responsible for issuing the digital currency in the experiments, although the possibility of other entities issuing a digital yen is not ruled out, he said.

Japan has one of the cashiest people in the world, with cash payments making up only 20% of the total settlement – well below the United States at 45% and China at 70%.

Authorities have been keen to promote cashless transactions to boost productivity, although progress has been slow, partly due to the inconvenience of digital payments.

Different digital platforms compete and remain incompatible with each other in Japan, unlike China, where a handful of massive platforms dominate the market.

Japan’s three megabanks – Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc – have each rolled out their own digital payment systems. But they are lagging behind the efforts of technology companies such as PayPay, part of the SoftBank Group.

Reporting by Leika Kihara; Editing by Simon Cameron-Moore

© Thomson Reuters

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