Three Major Banks In Japan Exploring The Formation Of Digital Currency

Three banks in Japan, want to create their version of a digital currency. (photo: pixabay doc)

JAKARTA - A consortium of about 70 Japanese companies, including the country's three major banks, will start an experiment to launch a digital currency in the second half of 2022. This statement emerged from the Japanese newspaper, Nikkei, Wednesday, November 24.

The digital currency will be backed by bank deposits and use a common platform to expedite large-scale fund transfers and settlements between companies, and cut costs, the newspaper said.

The consortium, which includes Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc, and Sumitomo Mitsui Financial Group Inc, has been meeting regularly since last year to learn how to build settlement infrastructure for digital payments.

The three banks have each launched their own digital payment systems but efforts are being made by tech companies such as SoftBank Group's PayPay unit.

The initiative could affect the Bank of Japan's ongoing separate experiment to issue a central bank digital currency (CBDC), as policymakers say they will work closely with the private sector if it is to issue a CBDC.

Japanese society is the most cash-loving population in the world and many transactions are still completed in notes and coins. Authorities, however, are keen to promote cashless transactions to increase productivity.