More than 30 major companies in Japan will launch verification tests on a possible private digital currency from fiscal 2021 starting next April, a group aimed at promoting common infrastructure for interoperable cashless payment services said Thursday.
The lack of interoperability between different cashless payment applications remains a hurdle both for consumers and retailers, as customers cannot use the payment app on their smartphone if a shop does not have a terminal that accepts it.
In June, Japan's three megabanks — MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank — and railway operator East Japan Railway Co., the issuer of smart card Suica, jointly set up the group to explore possible interoperable infrastructure for cashless payments and digital currency.
On Thursday, the consortium released a report proposing a common digital currency with an interoperable structure to allow different cashless payment service providers to use it while maintaining their original payment services.
"We would like to facilitate a wide range of settlement services," Hiromi Yamaoka, a former senior Bank of Japan official who serves as chairman of the consortium, said at an online news conference.
The consortium said it will become the Digital Currency Forum next month, joined by new members such as retailer Aeon Co., Kyocera Corp. and Kansai Electric Power Co.
The BOJ, the Financial Services Agency, the Economy, Trade and Industry Ministry, the Finance Ministry and the Internal Affairs and Communications Ministry remain as observers, the consortium said.
The central bank said last month it will start a feasibility study on a digital currency of its own in fiscal 2021.
The bank said that so far it has no plan to issue digital currency, but will be collaborating with other central banks and fintech firms in the study.
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