According to the Japan Times report, more than 30 major companies in Japan will launch verification tests on a possible private digital currency from fiscal 2021 starting next April, a group aimed at promoting common infrastructure for interoperable cashless payment services revealed. The lack of interoperability between different cashless payment applications remains a hurdle both for consumers and retailers. Customers cannot use the payment app on their smartphone if a shop does not have a terminal that accepts it.
Major Japanese banks jointly set up a group to explore digital currencies.
Earlier this year, Japan’s three megabanks — MUFG Bank, Sumitomo Mitsui Banking Corp., and Mizuho Bank — and railway operator East Japan Railway Co., the issuer of smart card Suica, jointly set up the group to explore possible interoperable infrastructure for cashless payments and digital currency. The consortium released a report proposing a common digital currency with an interoperable structure to allow different cashless payment service providers to use it while maintaining their original payment services.
Bank of Japan to start a feasibility study on a CBDC.
Hiromi Yamaoka, a former senior Bank of Japan official who serves as chairman of the consortium, said they would like to facilitate a wide range of settlement services. The BOJ, the Financial Services Agency, the Economy, Trade and Industry Ministry, the Finance Ministry, and the Internal Affairs and Communications Ministry remain as observers, the consortium revealed. As reported earlier, the Bank of Japan said it would conduct the first phase of experiments on basic functions core to CBDCs, such as issuance and distribution, early in the fiscal year beginning in April 2021. The experiments will be part of the central bank’s efforts to look more closely into how it can issue general-purpose CBDCs.