Japan’s Biggest banks will test digital currency payments soon

Big Japanese banks are working together to facilitate crypto-based payment systems to bring efficiency to the payment infrastructure. 

In the present time, most of the central banks of the world are trying their best to use blockchain technology in the traditional payment system to improve the functionality and ability to facilitate transactions with very high efficiency. But actually, most of the central banks are working on the development of the CBDCs and that is taking too much time. To overcome such delays, many private and commercial banks are trying their way to implement the use of blockchain technology with fast adoption.

High-profile banks in Japan including MUFG, SMBC, Mizuho, and Japan Post joined local crypto and blockchain-inclined organization to develop an ecosystem to bring the use of crypto & blockchain-based transactions. 

An organization under the Digital Currency Forum published a whitepaper and working criteria on this initiative on 24 November. According to the whitepaper, the new initiative of the organization will rely on the two-tier platform and that will rely on blockchain technology. 

“The Digital Currency Forum also envisions that digital currency, DCJPY will be able to connect organically with other digital platforms. In other words, the forum aims to realize a form of “Digital Payments as a Service” in which various economic activities and businesses can add payment and settlement functions.”

Under their initiative, they will create a new digital currency called  Digital Currency JPY (DCJPY).  The value of the JPY will be backed by the deposit funds by the users in the bank. 

The organization will use Proof-of-concept based Consensus. For this, the organization secured a $62 million investment led by SMBC, MUFG, and SBI banks, which are also part of the consortium. 

It is worth noting, this collaborative initiative of all these banks is outside the government authorities’ financial regulators but all work will be done under the observation of the national financial watchdogs like the Financial Services Agency, the Ministry of Finance, and the central bank. 

The main aim of this project is to bring the use of blockchain technology to facilitate fund transactions. And as per whitepaper details, they will pilot the project in 2023 among retail companies of the country. 

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