A Japanese financial services group is drawing plans to issue its own tradeable digital currency to be used for payments and instant P2P transfers.
Japan’s SBI Holdings, a major financial services group already invested in digital currencies and blockchain technology (via Ripple), is set to issue its own digital currency for payments. According to the prominent regional publication Nikkei, the financial group’s digital token will also be tradeable for Japanese yen and will be based on blockchain technology.
The digital currency will enable consumers to make payments at stores instantaneously and can also be used to make peer-to-peer transactions at significantly lowered costs compared to existing methods including credit cards and ‘digital money’ (wallet cash that assumes the value of fiat cash).
SBI’s digital currency will reportedly maintain a stable exchange rate to the Japanese yen. SBI’s employees will begin testing the digital currency at stores near the company’s Tokyo headquarters next year.
Less than 70% of Japan’s supermarkets accept cards due to an expensive onboarding process wherein credit card payment terminals cost ¥100,000 (approx. $900) to install, aside from monthly fees for their lease. For all the notions of being a technology-forward society, Japan is lagging behind its Asian counterparts – particularly China and Korea – in cashless payments. Such is the disparity that Japanese authorities have set a FinTech growth strategy with the ultimate aim of doubling the adoption rate of digital payments (currently at a measly 19%) over the next decade.
The wider retail economy in Japan is ripe for disruption from new financial technologies including bitcoin. After this year’s recognition as a legal method of payment, a boom in awareness and adoption of the cryptocurrency could see up to 300,000 Japanese storefronts accepting bitcoin by the end of the year.
Notably, SBI has already launched its own digital currency trading and exchange platform in 2016, making it the first bank-backed digital currency exchange. Launched in November 2016, the SBI Virtual Currencies Co., Ltd., raised approx. 300 million yen in capital in the days prior to its establishment.
SBI’s investment arm also led a ¥3 billion ($27 million) funding round funding round in investing into bitFlyer, Japan’s largest bitcoin exchange by trading volume in April 2016.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:12 AM UTC