Japanese Consortium Plans to Issue Bank Deposit-Like Digital Yen by End of Next Year

A consortium of 74 Japanese firms is planning to issue a digital yen that will work similar to bank deposits by the end of 2022, the consortium’s secretariat, DeCurret, said in a white paper and a progress report published on Wednesday.

• To ensure the stability of the digital currency, the consortium, dubbed Digital Currency Forum, is proposing a model similar to how bank deposits work, according to the white paper. The digital yen will be issued by banks as their liability, the paper added.
• Members of the Digital Currency Forum, include such banks as MUFG Bank, Sumitomo Mitsui Banking Corp., Mizuho Bank, Japan Post Bank, industry heavyweights like the Nippon Telegraph & Telephone Corp., East Japan Railway, and Mitsubishi Corp., as well as local governments. The Bank of Japan, Financial Services Agency of Japan and three ministries are observing its activities.
• The consortium plans to experiment with large business transactions using the digital yen as early as January, according to the progress report. The consortium’s subcommittee on Settlement in Industrial Distribution, led by Mitsubishi, will be testing “the automatic execution of contracts using digital currency in the settlement of maritime transportation for transactions,” the progress report said.
• The consortium will also be releasing a beta version of the digital currency marketplace for non-fungible tokens (NFTs) by 2022, the progress report said.
• The focus on business transactions is a marked difference from China’s digital yuan, set to be the first central bank digital currency (CDBC) to be rolled out by a major economy, which has focused on retail transactions up to this point, with some exceptions.

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