The Japanese authorities will start introducing digital currency from 2021. So they want to accelerate the development of the economy and the transition to non-cash payments.
More than 30 major Japanese companies will begin experimenting with a shared, private digital currency to drive digitalization. The move follows the announcement by the Bank of Japan of plans to introduce the digital yen. Local publications say the plan underscores a growing awareness of the need for Japan to catch up with global advances in fintech.
The initiative group consists of the three largest banks in Japan, as well as brokerage, telecommunications, utilities and retailers. They will all experiment with issuing a digital currency that will use a common settlement platform.
“There are many digital platforms in Japan, none of which are large enough to handle cash payments,” said Hiromi Yamaoka, former CEO of BOJ Bank, which leads the group, in an online briefing.
Private banks will be responsible for issuing digital currency in the course of experiments, although the possibility of issuing the digital yen by other entities is also not excluded by the authorities. So they want to accelerate the development of the country’s economy – Japan is among the countries that most often use cash. Cashless payments account for only 20% of the total. This is much lower than in the US (45%) or China (70%).
Authorities have been keen to promote cashless transactions to boost productivity, although progress has been slow in part due to the inconvenience of digital payments. Various digital platforms compete and remain incompatible with each other in Japan, in contrast to China, where the market is dominated by several large platforms.