A group of Japanese companies has said it will develop and test a private digital yen that would work alongside cash.
November 19, 2020 | AtoZ Markets – Major Japanese companies have agreed to participate in an experiment to launch a private digital currency on a single platform. The project will begin in 2021, writes Reuters.
30 Japanese companies will test out a digital Yen
The group includes more than 30 companies, including the three largest banks, brokers, and telecommunications firms. According to participants, the initiative is necessary for the development of digitalization in the country, where cash accounts for about 80% of the total volume of payments.
The group is headed by the ex-head of the Bank of Japan Hiromi Yaamaoka. He pointed to a large number of digital platforms, none of which competed with cash.
“We want to create a structure that will make different platforms mutually compatible,” said the head of the group.
According to him, private banks will be engaged in the issue of digital currency as part of the experiment. However, this task can be entrusted to other organizations, added Yaamaoka.
The initiative will not interfere with research by the Japanese regulator to issue its own digital currency, the group members say. The central bank and the country’s financial services agency will oversee its implementation.
Meanwhile, research on Central Bank digital currency (CBDC) has accelerated in Japan as well, but there are many challenges in introducing it, and there is a view that it will take several years to prepare for issuance. As AtoZ Markets earlier reported, the Bank of Japan plans to start a CBDC experiment next spring.
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