In Brief:
- The consortium of 70 Japanese companies and banks plans to launch a digital currency “DCJPY” in 2022.
- The digital currency will be backed by bank deposits and use a common platform for fund transfer.
- Some companies will experiment with digital currency for industrial use.
Today, a Consortium of a large group of Japanese companies and 3 major banks revealed a plan to launch a digital yen “DCJPY”. The “DCJPY” is expected to launch in 2022 after successful trials in upcoming months.
Kazuhiro Tokita, chief executive of cryptocurrency exchange DeCurret said in a conference that the Japanese digital currency, backed by bank deposits will use a common platform to cut down the transaction process, and also, it will lead to coordination among companies.
The development of digital currency is under process since last year and the consortium of companies including Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc, and Sumitomo Mitsui Financial Group Inc were included in the development to advance a project and establish a common settlement infrastructure for digital payments.
Before this project, three-mega banks had already rolled out their own digital payment systems, but they could not stand among the other competitors in the market such as PayPay.
Bank Co Ltd, brokerages and insurers, and non-financial firms such as Nippon Telegraph and Telephone Corp, Kansai Electric Power Co Inc, and East Japan Railway Co will also play crucial roles in this development.
Some companies from the consortium want to test the potential of digital currency in industries ranging from energy to retail.
“A digital currency system built on a bank deposit-backed common platform will fit the CBDC that could be planned and implemented” in Japan, Toshihide Endo, a former head of Japan’s Financial Services Agency who is currently a special advisor to DeCurret, said at the Wednesday conference, referring to a central bank digital currency.
Digital payment services are ballooning in its area and major countries are focusing on digital currency development. The Reserve Bank of India is expected to launch a digital currency in the fiscal year 2023. Similarly, the Bank of Israel is testing the Ethereum blockchain for its digital currency.
