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Japan will launch a bank deposit-based digital currency in 2022

A test run of a new digital currency supported by bank deposits will begin in Japan this year, involving the country’s leading banks and some 70 other companies and organizations. The test facility will focus on the feasibility of digital currency for low-cost business transactions, such as large-scale payments between companies. The group aims to have the currency in circulation as early as the second half of 2022, Nikkei reported.

The Digital Currencies Forum announced the experiment on Wednesday. The forum includes MUFG Bank, Sumitomo Mitsui Banking Corp., Mizuho Bank, Japan Post Bank and the Nippon Telegraph and Telephone Group. East Japan Railway, which operates Tokyo’s busy Yamanote line, Mitsubishi Group, Kansai Electric Power and retail giant Seven & i Holdings are also members of the forum. The Japan Financial Services Agency and the Bank of Japan will be present as observers

The provisional name of the currency is DCJPY. Tests will begin this year or early next year to assess whether digital currency is capable of conducting business-to-business transactions and trading in electricity.

DCJPY will use blockchain distributed ledger technology and bank deposits provide cover. Users can start transactions in digital currency after opening an account. Expected to be used by domestic companies and individuals, the minimum transaction value is set at 1 yen. they are mainly used for smaller consumer transactions. While electronic money cannot usually be exchanged for cash once it has been placed on the card, digital currencies can be exchanged freely, making them more useful for businesses.

A payment platform in which different industries can improve the speed of transfers and payments while also reducing transaction costs. Supporting the currency with bank deposits is intended to strengthen its credibility

Many central banks around the world are launching or considering the introduction of digital currency. The Bank of Japan has no specific plans to issue digital currency yet. However, a second phase of experiments will be launched next April, focusing on the conversion between digital currency and cash and possible collaboration with private sector clearing mechanisms.

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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