Next Year Japanese Banks Will Take Action About Digital Yen
The creation of digital currencies did not pass by Japanese banks. More than 30 banks cooperating on digital yen experiments.
According to Reuters, Japanese banks are collaborating on issuing a digital currency to support digitalization at the currency level. On Thursday, the organizing body reported that they plan to experiment with digital currency next year. However, it is surprising that Japanese people are more prone to cash transactions rather than electronic payments. This issue could be one of the hurdles to overcome primarily.
Japanese people are not engaged in cashless transactions. 20% of all transactions are cashless in Japan. It is much more below the United States and Chine, 45% and 70% respectively. Governmental bodies and companies need to promote cashless payments to implement digital yen successfully in the first place. The former Bank of Japan executive, Hiromi Yamaoka commented on digital currencies in the online briefing:
“Japan has many digital platforms, none of which are big enough to beat cash payments,”
“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.”
Bank of Japan in Digital Currency Project
Earlier on, the Bank of Japan announced its intentions to create CBDC. In the announcement made in July 2020, the purpose was to check the possibility of creating a digital currency at the technical aspect. They think that there are two main barriers to the application of digital currency. Surprisingly, according to Nikkei, in 2018, only 65% of the population had smartphones, and children and older people will have hardships to use digital currencies. To solve this, they had to establish some terminals to realize payments. Secondly, it is essential to provide a seamless electric supply. Those electronic devices do not work offline.
Execution of digital yen can change the experience of Japanese people with cashless payments. It is significant to move on to digital payment option as the world begins to embrace it.
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