A consortium made up of 70 Japanese firms have banded together to create a Yen-based digital currency. Tentatively called “DCJPY”, the currency involves the country’s three biggest banks and is planned to be launched in 2022, with trials coming in a few months.
The consortium, which includes Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group, have been meeting regularly since last year to build a common settlement infrastructure for digital payments. DCJPY will be backed by bank deposits and use a common platform, which would allow large-scale fund transfers, according to cryptocurrency exchange DeCurret CEO Kazuhiro Tokita, who is also the leader of the consortium.
It’s also worth noting that this new digital currency is completely separate from the Yen-based Central Bank Digital Currency (CBDC) being developed by the Bank of Japan, which is just a virtual form of a country’s official currency and can be used as legal tender. Japan is also one of many countries that are still reliant on physical cash, with 80% of transactions still being made using notes and coins.
With these planned digital currencies, Japanese authorities are working hard to promote cashless payments to increase productivity and make the economy more consumer friendly. Other countries such as China and India also have plans to launch their own CBDC in the near future.