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Three Japanese banks will start testing a private version of the digital yen in 2021

Three Japanese banks will start testing a private version of the digital yen in 2021

Japan’s three largest banks, together with 30 organizations, will begin experimenting with a private version of the digital yen next year to move the country to digital payments.

This was announced by the former head of the Bank of Japan and the current chairman of the task force on testing the digital yen Hiromi Yamaoka (Hiromi Yamaoka). The group includes Japanese banks Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group, brokerage and telecommunications companies, municipal enterprises and retailers. These firms will test the digital yen using a single platform for conducting calculations.

Yamaoka said the initiative aims to digitalize financial services in a country dominated by the use of cash. In Japan, non-cash payments account for only 20% of the total settlement volume, while in the US and China — 45% and 70%, respectively.

“There are many digital platforms in Japan, but none of them can beat cash payments. We don’t want to develop another isolated platform. We intend to create a system that will ensure the compatibility of different platforms, ” said group chairman Hiromi Yamaoka.

He added that private banks will be responsible for issuing the experimental digital currency. However, it is possible that other institutions will be able to perform this task. The introduction of the latest technologies in the country’s financial sector will allow it to “keep up with progress”. Such experiments will help to identify possible options for using digital currencies in the country, in compliance with the requirements of Japanese financial regulators.

However, recently, a member of the Japanese parliament, Kozo Yamamoto, said that in order to issue a digital yen, it would be necessary to change the laws defining the powers and responsibilities of the Bank of Japan. Recall that in July, the Japanese central bank created its own division for the development of the state cryptocurrency, starting cooperation with European banks and analytical centers.