After the decision of the Japanese central bank to test digital fiat, major private companies have now decided to participate in an experiment to launch a private version of the digital yen.
According to a Reuters report on Thursday, more than 30 major Japanese companies joined hands for the initiative. The group includes three major Japanese banks, brokerages, telecommunication firms, utilities and retailers.
The group has already decided that the private banks will issue the digital currency, but the roles of other participants are not clear yet.
The group is aiming to initiate the project next year, and the participants will conduct experiments for issuing a digital currency using a common settlement platform.
“We don’t want to create another silo-type platform. What we want to do is to create a framework that can make various platforms mutually compatible,” Hiromi Yamaoka, a former Bank of Japan (BoJ) Executive and Chairman of the group, said.
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Digital Yen on the Way
Last month, the Japanese central bank also finalized its decision to test a central bank digital currency (CBDC) and will start testing ‘as early as possible’ at the beginning of FY 2021, which starts in April.
Notably, the BoJ is also heading another consortium of several top global central banks, including monetary regulators in the UK, Europe, and Canada, in studying the feasibility of issuing digital currencies.
Unlike other major economies, Japan has a large share of cash transactions. Reuters highlighted that only 20 percent of the Japanese settlements are cashless, compared to 45 percent in the United States and 70 percent in China.
“Japan has many digital platforms, none of which are big enough to beat cash payments,” Yamaoka added.