The Bank of Japan’s recently announced plan to experiment with issuing a digital yen.
The group consists of banks, brokerages, telecommunication firms, utilities and retailers, according to a Reuters report published on Nov. 19.
Hiromi Yamaoka, a former BOJ executive who chairs the group, stated:
“Japan has many digital platforms, none of which are big enough to beat cash payments. We don’t want to create another silo-type platform. What we want to do is to create a framework that can make various platforms mutually compatible.”
He also noted that private banks will be in charge of issuing the digital currency in the experiments, although the possibility of other entities issuing a digital yen will not be ruled out.
According to the Reuters report, authorities have been keen to promote cashless transactions to expand productivity, although progress has been slow partly because of the inconvenience of digital payment.
Japan’s three megabanks – Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc – have all developed individual digital payments systems before, including digital tokens.
Japan has among the most cash-loving people in the world, with cashless payments making up only 20% of total settlement – well below the United States, with 45% and China with 70%.