Japanese mega-banks join consortium to launch yen-based digital currency

A consortium of around 70 Japanese companies, including the country’s largest financial institutions, joined forces to test and launch a ...



A consortium of around 70 Japanese companies, including the country’s largest financial institutions, joined forces to test and launch a new yen-based digital currency in fiscal year 2022, sending a strong signal that the private sector adopted blockchain-based payment systems.

The new digital currency, dubbed “DCJPY”, will be backed by bank deposits and build on a common platform to speed up money transfers and large settlements between participating businesses, according to to Kazuhiro Tokia, Managing Director of DeCurret Cryptocurrency Exchange.

DeCurret heads the consortium, which includes banks Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group. The consortium also consists of Japan Post Bank Co Ltd., Nippon Telegraph and Telephone Corp, East Japan Railway Co and Kansai Electric Power Co Inc. According to Reuters, the group has been meeting regularly since 2020 to discuss the creation of a new platform. – digital payment form. Payments.

In terms of total deposits, Mitsubishi, Mizuho, ​​Sumitomo and Japan Post Bank are among the five largest financial institutions in Japan.

Within the public sector, the Bank of Japan has prioritized development of a central bank digital currency, or CBDC, with an emphasis on providing transparent payment channels between the so-called digital yuan and electronic payment services. While the BOJ spearheads this effort, the end goal is to encourage the private sector to adopt a CBDC. As Cointelegraph reported, the Bank of Japan CBDC pilot tests are expected to be completed by March 2022.

Related: Asian CBDC Projects: What Are They Doing Now?

The deposit-backed infrastructure developed by the consortium aligns with BOJ’s CBDC framework, according to DeCurret adviser Toshihide Endo, who previously headed the Japan Financial Services Agency.