Big Banks in Japan Plan to Launch State Digital Currency

Big Banks in Japan Plan to Launch State Digital Currency. According to recent reports from Japan, it seems that big banks in that country are ready to accept digital currencies as a viable method of payment. Those reports indicate that the banks are working on a plan to launch their own digital currency called J Coin. As the sources from those banks say, the new digital currency will be available before Olympic Games 2020 in Tokyo.

These plans are coming as a response to Alibaba‘s move: one of the biggest companies from China provided mobile payment service in the country which had a huge effect on the banks and their business in Japan. Because of that, banks are ready to provide their clients with the opportunity to use J Coin in order to make payments through their mobile phones which was not available in the country before.

A group of banks joined into a consortium headed by Mizuho Financial Group as well as by Japan Post Bank to provide their clients with the option to pay for services and goods by only using their mobile phones. Most importantly, Japanese Central Bank has issued a statement expressing their support for the launch of J Coin. Besides that, financial regulatory agencies in Japan have also voiced their approval and for the first time, digital currencies will be officially recognized as a legal method of payment.

It has been said that J Coin will be convertible to Japanese yen and the exchange rate of the conversion will be one-to-one. Their clients will be able to make conversions by using the app on their smartphone or through QR code that will be available in stores all over the country. Interestingly, the banks will not be charging their fees in that process. Instead of that, they will be collecting data on the clients’ patterns of spending.

Even before the J Coin initiative was publicly announced, Mizuho Financial Group had already been working on launching their own digital currency called MUFG coin. Some reports mention that the leading officials of all banks involved in this operation have been discussing the possible inclusion of MUFG coin into the initiative and plans for the J Coin.

Before J Coin campaign, Japan’s biggest banks have been warning governments that Alibaba’s payment service will allow the company to send the data of the customers back in China and many still consider that to be a huge problem. Besides that, one of the biggest reasons why Japan’s biggest banks decided to launch digital currency is the fact that Japanese have been relying on cash too much as some analysis show that 70 percent of all transactions are conducted with cash.

The introduction of J Coin could also have good benefits for the government as some analyses point out that Japan’s economy will be getting additional ¥10bn as a result of cutting out the costs that retailers and consumers face in the economy now. All in all, Japan will apparently become the first country in the world with the state-backed digital currency.

Written by Vedran Ostojic