As tradition and modern technology are flourishing side-by-side in Japan the same pattern is being mirrored in the cryptocurrency ecosystem of the country. It ranks as one of the top crypto-friendly nations on Earth, with favorable and forward-thinking cryptocurrency regulations. Bitcoin was declared a legal tender in 2017, and at one point, the Japanese yen dominated the trading of Bitcoin. The Japanese Financial Services Agency (FSA) has also received 190 cryptocurrency exchange license applications. Despite these figures Japan continues to be majorly cash-based society, being dependent on cash a lot more than other developed countries. The Japanese central bank, Bank of Japan does not see the need of issuing a digital currency.
However many Japanese banks are now coming forward with their own digital currencies.
- One of the largest financial institutions of this world, the Mizuho Financial Group, will be issuing their own digital currency under the J- Coin Project. The digital currency will be (pegged) 1:1 to the Japanese yen to reduce volatility, and the commission payable by shops to credit card companies will be kept low. Mizuho also hopes in the future that the J-Coin could be used for salary payments and also to team up with Alipay, an online payments platform that uses QR codes, to enable foreign visitors to easily make payments in Japan.
- The banks plan to launch the new digital currency before the 2020 Olympics in Tokyo. (Financial Times)
- MUFG is the largest financial company in Japan and the world’s fifth-largest bank, with $2.7 trillion assets under management. The MUFG coin will be pegged 1:1 to the Japanese yen and the company aims for it to be applied to a variety of everyday financial needs, such as withdrawals and deposits to transactions and payments.
- In August 2007, Japan’s Fisco Ltd., large financial services and financial information company, issued Bitcoin bonds. The bonds have a 3 percent annual interest rate and return Bitcoin when it matures.
Japan is not alone when it comes to banks launching digital currencies. The phenomenon has been observed across the globe, with several local and central banks either piloting or considering the issuance of their own digital tokens, including Russia, England, Thailand, Venezuela, Norway, Sweden, the Bahamas, and Lithuania, to name a few. HSBC, Barclays, UBS, and Santander are reportedly creating a “Universal Settlement Coin” that would make trade between the organizations more efficient. The coin is inspired by today’s digital currencies.
But the application of bank-backed digital currencies becomes particularly interesting in a nation that is largely cash-dependent such as Japan, with the potential it has to persuade people to adopt a nontraditional, less familiar, but ultimately more cost-effective and efficient means of payment.
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