Bank of Japan and Cryptocurrency payment system
Bank of Japan and Cryptocurrency – A new digital currency backed by global banks is set to be tested in Japan this year. This is an effort that will involve the nation’s largest banks and about 70 other companies and organizations. This project will focus on the feasibility of digital currency for low-cost business transactions, such as large payments between companies. The group aims to put the currency into circulation in the second half of 2022.
As you know, cryptocurrency become a worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator. The network is peer-to-peer and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes through the use of cryptography and recorded in a public distributed ledger called a blockchain.
Bank of Japan and Digital Currency
Digital Currency Forum has announced this process. The forum includes MUFG Bank, Sumitomo Mitsui Banking Corp., Mizuho Bank, Japan Post Bank, and the Nippon Telegraph and Telephone group. East Japan Railway – which operates Tokyo’s bustling Yamanote line – is home to Mitsubishi Corp., Kansai Electric Power, and retail giant Seven & I Holdings.
The name of the coin will be a provisional one at the beginning, namely DCJPY. According to sources, tests to assess the digital currency’s ability to handle transactions will begin no later than next year. DCJPY will use the blockchain technology of the distributed registry and will be supported by bank deposits. Users can start trading in digital currency once they open an account. It is expected to be used by national corporations and individuals, the minimum transaction value is set at 1 yen (less than 1 cent).
Electronic money is widely used in Japan
Electronic money is widely used in Japan, with tens of millions of commuters carrying Suica and Pasmo train permits, especially for small consumer transactions. The electronic money used in this way cannot be converted back into cash once placed on an electronic card, while digital currencies can be freely exchanged, making them more useful for companies.
A payment system with participation in different industries has the potential to improve the speed of transfers and payments, reducing transaction costs. Supporting the currency with bank deposits is meant to increase its credibility.
Many of the world’s central banks tend to launch or consider digital currencies. The Bank of Japan is focusing on digital currency and cash conversions, as well as potential cooperation with private sector settlement mechanisms.
A package of regulations in Japan’s banking industry is driving the rise in the number of financial technology startups, raising hopes that the world’s third-largest economy can finally catch up with a global funding boom.