Japanese companies and banks to pilot private digital currency

Major Japanese companies have agreed to participate in an experiment to issue a private digital currency on a single platform. The project is set to begin in 2021, Reuters reports.

A group of more than 30 companies has been formed, including the three largest banks, brokers and telecommunications firms. According to participants, the initiative is needed to push digitisation in a country where cash accounts for around 80% of total payments.

The group is led by former Bank of Japan governor Hiromi Yamaoka. He pointed to the large number of digital platforms, none of which has yet challenged cash.

“We want to create a framework that will make the various platforms interoperable,” the group’s head said.

According to him, the issuance of the digital currency within the experiment will be undertaken by private banks. However, this task could be entrusted to other organisations as well, Yamaoka added.

The initiative will not hinder the regulator’s own studies into issuing its own digital currency, participants say. The Bank of Japan and the Financial Services Agency will monitor its implementation.

Earlier, some major Japanese companies had already conducted experiments with digital currency. In 2016, Mizuho Financial Group, in partnership with IBM, completed testing of an asset for new mobile payment services.

In 2017, MUFG, the financial-services giant, announced the start of pilot tests of its own digital currency MUFG for internal operations.

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