Japanese central bank the Bank of Japan (BOJ) announced back in the month of October to begin pilot trials on its Central Bank Digital Currency (CBDC) known as Digital Yen next year in April 2021. Following this announcement, several major firms have revealed their interest in testing private Digital Yen by the next year.
News outlet Reuters has reported recently that over thirty firms coming from different sectors such as retail, utilities, and telecoms have said to collaborate with each other on developing and conducting a pilot trial of a private digital currency. They will carry out the testing of Digital Yen next year.
Some of the members of this group include the three largest banks in Japan such as Mizuho, Sumitomo Mitsui, and MUFG, Accenture Japan, Nomura Holdings, Daiwa Securities Group, Japan’s telecommunications giant NTT and several other retail and financial firms. The country’s Financial Services Agency (FSA) and the Bank of Japan will be observing this initiative.
The organizing body of the group said that they are starting this initiative in a bid to promote digitalization in the country of Japan which is considered as one of the most cash-loving countries in the world.
There are several digital platforms out there in the country but none of them is capable of beating cash payments, said the Chair of the group as well as the former Bank of Japan executive Hiromi Yamaoka. Adding more to his comments, Yamaoka said that they do not intend to introduce a so-called “silo-type platform” but their main purpose is to develop “a framework that can make various platforms mutually compatible.”
If we talk about cashless payments in the country of Japan they only count for twenty percent of the entire settlements. Well, this figure is more than half below that of the United States which has 45 percent of total settlements. While on the other hand, China counts for 70% of it.
On the 9th of October, the Bank of Japan said that it will start experimenting with its central bank digital currency next year. Digital Yen’s testing will be conducted in three phases.