A consortium of about 70 Japanese companies, including the country’s largest financial institutions, has joined forces to try to launch a new yen-based digital currency in fiscal 2022, sending a strong signal that the private sector has embraced blockchain-based payment systems.
According to Kazuhiro Tokia, CEO of crypto exchange DeCurret, the new digital currency, called “DCJPY”, will be halted by bank deposits and will rely on a common platform to speed up money transfers and settlements between participating companies.
DeCurret leads a consortium of banks Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group. The consortium also includes Japan Post Bank Co. Ltd., Nippon Telegraph and Telephone Corp., East Japan Railway Co. and Kansai Electric Power Co. Inc. According to Reuters, the group has been meeting regularly since 2020 to discuss creating a new settlement platform to digitize payments.
Mitsubishi, Mizuho, Sumitomo and Japan Post Bank are among the five largest financial institutions in Japan in terms of total deposits.
In the public sector, the Bank of Japan is prioritizing the development of a central bank digital currency, or CBDC, with an emphasis on providing seamless payment channels between so-called digital yuan and electronic payment services. While the Bank of Japan is spearheading these efforts, the ultimate goal is to stimulate private sector adoption of the CBD. Beta testing by the Central Bank of Japan for the Bank of Japan is expected to be completed by March 2022, Cointelegraph reports.
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According to DeCurret consultant Toshihide Endo, formerly head of the Japan Financial Services Agency, the infrastructure backed by deposits is compatible with the Bank of Japan’s vision.