Digital currencies made a huge wave in the economic sphere the past few years. Crypto is secure and has been proven to be efficient when making large fund transfers.

This quality makes it attractive to criminals, but governments worldwide are seeking ways to harness this power for good. Japan is a hub for cryptocurrency and is one of the most favorable countries for crypto exchanges and new crypto listings.

The Parties Involved

In 2021, it was rumored that the Japanese government, in association with three major banks, was in the process of testing a legal, yen-based digital currency. It’s now confirmed that the three banking corporations include Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group. Moreover, more than sixty other banks have formed a partnership to work toward this cause. This partnership is led by Kazuhiro Tokita, CEO of crypto exchange platform DeCurret. It also includes some major corporations in various fields like energy and healthcare. The three major banks mentioned above could have been way ahead with their plans were it not for delays caused by fintech firms that have yet to embrace the vision, like PayPay from SoftBank Group Corporation.

The Vision

The digital currency set to be tested in 2022 is called “DCJPY.” Unlike other cryptocurrencies, DCJPY will be centralized and controlled by the banking associations. Japanese lawmakers have already vowed to work closely with all the involved parties when the Central Bank Digital Currencies (CBDC) is fully formed. Many of the corporations involved have invested in this project, hoping to see the new era of crypto payments come to play in their respective fields. Even the retail industry is set to be heavily influenced once DCJPY is launched officially. The digital currency will enable large fund transfers to be completed quickly, securely, and for free. DCJYP will be backed by customer deposits, allowing the banks to maintain the required balance between assets and liabilities.

Japan – A Country That Loves Cash

The irony is that Japanese people still prefer using cash to other digital payments like mobile money transfer, which is readily available for them. However, the country could warm up to crypto because it will have to catch up with the rest of the globe. Cash is slowly being phased out everywhere, and if the Japanese people hope to maintain smooth merchant relations with people in other countries, they will have to change some systems. That’s why the government is pushing for the formation of the CBDC – to boost the country’s economy and make Japan more consumer-friendly by normalizing the use of cryptocurrencies.

Will Crypto Completely Replace Fiat Currency?

Statistics so far have shown that digital currencies could completely replace fiat currencies in the next five to ten years. Already, international companies like PayPal and Visa have partnered up with fintech teams to help them accommodate digital currencies in their systems. Moreover, the public tends to lean towards convenience. Therefore, the option that will offer more comfort will win more customers and have preeminence.