Consortium of Japanese companies to test digital currency in the coming months, launch in 2022

A man walks past a sign for Mitsubishi UFJ Trust and Banking Corporation, the asset management unit of Japanese Mitsubishi UFJ Financial Group Inc. (MUFG), in Tokyo, Japan, July 31, 2017. REUTERS / Issei Kato / Files

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  • The consortium includes the three mega-banks of Japan
  • The goal is to distribute digital currency during fiscal year 2022
  • Bank deposits will temporarily support the currency “DCJPY”

TOKYO, Nov.24 (Reuters) – A consortium of around 70 Japanese companies, including the country’s three mega-banks, has announced plans to launch a yen-based digital currency in fiscal year 2022 after starting trials in the coming months.

The digital currency, tentatively called “DCJPY,” will be backed by bank deposits and will use a common platform to accelerate large-scale fund transfers and settlement between companies, said Kazuhiro Tokita, chief executive of the exchange. cryptocurrency firm DeCurret, which heads the consortium, said at a press conference on Wednesday.

The consortium, which includes Mitsubishi UFJ Financial Group Inc (8306.T), Mizuho Financial Group Inc (8411.T) and Sumitomo Mitsui Financial Group Inc (8316.T), has been meeting regularly since last year to explore ways to build a common settlement infrastructure for digital payments.

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The three mega-banks have each introduced their own digital payment systems, but the efforts of tech companies like PayPay – backed by tech investor SoftBank Group Corp (9984.T) – that aren’t part of the consortium are lagging behind.

The consortium includes other lenders such as Japan Post Bank Co Ltd (7182.T), brokerage houses and insurers, and non-financial companies such as Nippon Telegraph and Telephone Corp (9432.T), Kansai Electric Power Co Inc (9503.T) and East Japan Railway Co (9020.T). Some will participate in experiments to assess the use of such a currency in sectors ranging from energy to retail.

“A digital currency system built on a common platform backed by bank deposits will suit the CBDC which could be planned and implemented” in Japan, said Toshihide Endo, former head of the Japan Financial Services Agency who is currently DeCurret’s special adviser, at Wednesday’s conference, referring to a central bank digital currency.

The initiative could affect the Bank of Japan’s ongoing experience with the CBDC. Policymakers have said they will work closely with the private sector if the BOJ issues a CBDC. Read more

Japan is one of the most cash-hungry countries in the world, with many transactions still carried out using banknotes and coins. Yet the authorities were keen to promote cashless transactions to increase productivity.

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Reporting by Leika Kihara and Kantaro Komiya; Editing by Stephen Coates and Christopher Cushing

Our Standards: Thomson Reuters Trust Principles.

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