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Consortium of Japanese firms to test digital currency in coming months, launch in FY2022

Consortium of Japanese firms to test digital currency in coming months, launch in FY2022
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A man walks past a billboard for the Mitsubishi UFJ Trust and Banking Corporation, the asset management unit of Mitsubishi UFJ Financial Group Inc. Japanese (MUFG), in Tokyo, Japan, July 31, 2017. REUTERS/Issei Kato/Files

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  • The consortium includes three huge Japanese banks
  • The goal is to distribute digital currency in fiscal year 2022
  • Bank deposits will initially be renamed the currency “DCJPY”

TOKYO (Reuters) – A consortium of about 70 Japanese companies, including the country’s three mega-banks, said it aims to launch a yen-based digital currency in fiscal 2022 after trials begin in the coming months.

Kazuhiro Tokita, CEO of crypto exchange DeCurret, which leads the consortium, said the digital currency, tentatively called “DCJPY,” will be backed by bank deposits and the use of a common platform to accelerate large-scale fund transfers and settlement between businesses. At a press conference on Wednesday.

The consortium, which includes Mitsubishi UFJ Financial Group Inc (8306.T), Mizuho Financial Group Inc (8411.T) and Sumitomo Mitsui Financial Group Inc (8316.T), has been meeting regularly since last year to study ways to build a common settlement infrastructure for digital payments. .

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Each of the three mega-banks has offered its own digital payment systems, but the efforts of technology companies such as PayPay – backed by technology investor SoftBank Group Corp (9984.T) – that are not part of the consortium.

The consortium includes other lenders such as Japan Post Bank Co Ltd (7182.T), brokerages and insurance companies, and non-financial companies such as Nippon Telegraph and Telephone Corp (9432.T), Kansai Electric Power Co Inc (9503.T) and East Japan Railway (9020 t). Some will participate in experiments to measure the use of such a currency in industries ranging from energy to retail.

Referring to the central bank’s digital currency, Toshihide Endo, a former head of the Japan Financial Services Agency and currently a special advisor to DeCurret, said at a conference Wednesday.

The initiative could affect the Bank of Japan’s ongoing experience with central bank digital currencies. Policymakers said they would work closely with the private sector if the Bank of Japan issued a CBD. Read more

Japan is one of the most cash-loving countries in the world, and many transactions are still made using banknotes and coins. The authorities are still keen to encourage cashless transactions to increase productivity.

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(Reporting by Leika Kihara and Kantaro Komiya); Editing by Stephen Coates and Christopher Cushing

Our Standards: Thomson Reuters Trust Principles.

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