Three major Japanese banks are planning to explore digital payment infrastructure in the country. According to a recent report, the Mitsubishi UFJ Financial Group, Mizuho Financial Group, and Sumitomo Mitsui Financial Group, are planning to form a study group to explore the benefits of developing a common settlement infrastructure for digital payments.
Local crypto exchange, DeCurret will serve as the group’s organizer, according to the report. The group is expected to meet twice every month, from June of this year through to September. The organizers noted that reps from the Bank of Japan, the Finance Ministry, and the Financial Services Agency would be attending meetings of the group as observers.
According to the report, citizens in the country are among the most cash-using population in the world. It said the government is trying to minimize this trend and promote cashless transactions instead, due to the COVID-19 pandemic. The report also noted that East Japan Railway and a number of other non-financial companies are also planning to participate in the group’s activities.
Hiromi Yamaoka, a former central bank official, will be the chairperson for the group, says the report. According to him, Japan citizens are refraining from employing the numerous digital payment systems that the country has. He added that, the group would search for other available solutions to prevent the people from overwhelming the usage of cash. He noted that one of them could be to enhance the inter-operability of digital currencies and infrastructure.
In the midst of the COVID-19 pandemic, people are being encouraged to make use of digital payment methods in order to minimize physical contact. Several central banks around the world have started exploring central bank digital currencies (CBDCs). Meanwhile, the Deputy Governor of the Bank of Japan had recently argued that CBDCs could only be beneficial to developing countries, but not advanced economies like Japan.
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