A consortium of roughly 70 Japanese companies, including the country’s largest financial institutions, have joined forces to test and launch a new yen-based digital currency in fiscal 2022, sending a strong signal that the private sector was embracing systems. blockchain-based payment methods.

The new digital currency, dubbed “DCJPY,” will be backed by bank deposits and will depend on a common platform to streamline large fund transfers and settlements between participating companies, according to Kazuhiro Tokia, CEO of cryptocurrency exchange DeCurret.

DeCurret leads the consortium, which includes banks Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group. The consortium is also made up of Japan Post Bank Co Ltd., Nippon Telegraph and Telephone Corp, East Japan Railway Co and Kansai Electric Power Co Inc. According to Reuters, the group has been meeting regularly since 2020 to discuss the creation of a new platform. settlement for digital payments.

In terms of total deposits, Mitsubishi, Mizuho, ​​Sumitomo and Japan Post Bank are among the five largest financial institutions in Japan.

Within the public sector, The Bank of Japan has prioritized the development of a central bank digital currency, or CBDC, with a focus on providing seamless payment channels between the so-called digital yuan and electronic payment services.. While the BOJ is spearheading this effort, the ultimate goal is to incentivize the adoption of the CBDC by the private sector. As Cointelegraph reported, the Bank of Japan’s CBDC pilots are expected to be completed in March 2022.

The deposit-backed infrastructure the consortium is developing aligns with the BOJ’s CBDC framework, according to DeCurret adviser Toshihide Endo, who previously served as a director of the Japan Financial Services Agency.

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