Japan’s central bank is backing a scheme that could see the the cash-dependent country move toward a digital currency built on blockchain technology.
The J Coin, as it’s to be called, is under development by a group of Japanese banks with the blessing of financial regulators. According to the Financial Times (paywall), it’s meant to launch in time for the 2020 Tokyo Olympics as a way to streamline the country’s financial system.
At the moment, some 70 percent of all financial transactions in Japan use cash—a far higher amount than occurs in most developed countries, where cash has been on the decline for some time now. Relying so heavily on hard currency exacts costs in the form of transaction and handling fees, as well as the expenses associated with moving all those notes and coins around. Cash transactions are also easier to hide from regulators, and India, for example, cited shutting down the black market as one reason it decided to push aggressively towards digital money.
The idea for J-Coin is that it would sit alongside the Japanese yen, exchanged at a one-to-one rate, and be offered as a free service. In return, the banks that operate it would get detailed data on how people use it (as we’ve discussed before, that will indeed make people easier to track).
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