For one reason or another, cash is still king in the Land of the rising Sun where 70 percent of all transaction are made with paper money. A digital currency could help the country move into the cashless society, all while streamlining the financial system.
And apparently Japan Is planning to do something like that, and launch a digital currency of its own. Dubbed J-Coin, it is intended (as much as possible) to eliminate cash as a payment option and hit the market before the 2020 Olympic Games in Tokyo.
Not the Yen replacement
J-Coin is not intended to replace the Japanese Yen; rather, its creators envision working it in tandem with the fiat currency. However, J-Coin would be exchanged at a one-to-one ratio, and most importantly — it would enable regulators to actually track transactions, which is hard to do in a cash-based society.
What is not clear is whether Japan will opt to use a blockchain-based infrastructure for J-Coin, or will rather go with a centralized solution.
A recent report from the Bank of Japan — and for what it matters, European Central Bank — has found that the two financial institutions don’t consider blockchain “mature enough” for the job.
On the other hand, we know that while banks don’t like Bitcoin and other cryptocurrencies that are out of their control, they like the idea of having their own proprietary cryptocurrency.
The world’s largest Bitcoin market
It was in mid-September of this year when Japan found itself at the top spot as the largest Bitcoin exchange market with 50.75 percent share.
China’s decision to ban ICOs played a big role in this as many traders decided to leave the world’s most populous country and in most cases, head to Japan. Before that, United States was the market-leading country, but with new traders added from China, the Land of the rising Sun is now also the Land of Bitcoin.
Also benefiting from the Chinese authorities’ ban on ICOs is South Korea, which too has grown in the past few weeks.
Final note
All being said — and presuming everything goes as planned — we hope to see the J-Coin starting to “work” in the next few years. At least a part of the market is ready, and it will be up to the government and major stakeholders to educate the public and move them towards using digital payments rather than cash.
We will be watching how this story unfolds, and get back to you as soon as we have something new to add. Stay tuned in the meantime.