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A group consisting of Japan’s biggest firms, such as its three biggest banks, brokerages, and retailers, will engage in a pilot to issue a private and widely-accepted digital Yen, as per news outlet Reuters today. The project will start in 2021.
Efforts towards building a cash-free Japan, a nation historically dependent on cash, have accelerated this year amidst the coronavirus pandemic and an increased, worldwide push for state-backed digital currencies.
But government initiatives aside, corporations want in on making a common digital currency platform. “Japan has many digital platforms, none of which are big enough to beat cash payments,” said Hiromi Yamaoka, a former Bank of Japan executive who heads the new group.
He added that instead of creating multiple platforms—each with its own technology backend and currency—the project aims to build a singular platform that can be accessed via various methods.
However, while Japan’s biggest banks will be in charge of issuing the digital currency in the experiments, other Japanese entities that are not part of the group may still issue their own digital Yen, noted Yamaoka.
The announcement comes weeks after the Bank of Japan, the country’s central bank, said it would engage in pilot experiments with the issuance and scope of a digital Yen, one that runs seamlessly alongside its current financial system.
The central bank has also made a ten-member digital Yen division for expediting the effort, suggesting an urgency in the matter as its neighbor China comes close to a full-fledged rollout of its own digital Yuan.
Japan’s not alone in pushing for a digital currency. As per a report by the Bank of International Settlements, an international regulatory body, 80% of the world’s central banks are exploring a digital counterpart to their respective fiat.