As economies continue to digitize, Japan is set to launch its first bank-backed digital currency in 2024. On October 12, digital currency and electronic payments business DeCurret Holdings released a white paper on its crypto proposal, the “DCJPY.” The coin will be released in July 2024, according to the organization.
According to cryptocurrency exchange DeCurret, a group of Japanese companies will establish a digital currency for the trade and settlement of sustainable energy certificates by July 2024. GMO Aozora Net Bank will issue the yen-based digital currency “DCJPY,” which will operate on the DeCurret network.
Japan catches up with the digital world
The white paper indicates that the DCJPY Network will comprise the Financial Zone and the Business Zone. The former will include banks minting deposits as digital currency on the blockchain, while the latter will be reserved for transactions. Additionally, the Business Zone will offer space for the issuance of nonfungible, security, and governance tokens.
Aozora Bank, a Japanese commercial institution with 19 domestic branches, will be the primary issuer of the DCJPY, which will be supported by deposits in the Japanese yen. DeCurret reported in 2021 that 70 Japanese companies would form a consortium to participate in the DCJPY Network.
DeCurret is backed by 35 shareholding companies, including Japan Post Bank, Mitsubishi, and Dentsu Group, although the white paper does not list the specific identities of the network’s participants.
It is expected that the currency system of the future will make further contributions to economic development and people’s welfare through fulfilling more advanced functions of information and data processing. Digital currencies should play a central role in this process.
Hiromi Yamaoka, chairperson of industry research group Digital Currency Forum
On October 18, DeCurret will host a seminar on the white paper explaining the project’s main themes. The meeting will take place in Tokyo and will not be broadcast online.
The Bank of Japan disclosed the results of the second phase of its central bank digital currency experiment in May 2023. It will make a definitive determination regarding the issuance of a “digital yen” by 2026.
Binance and Mitsubishi UFJ Trust and Banking Corporation are investigating the issuance of stablecoins denominated in Japanese yen and other foreign currencies in Japan.
Details of the DCJPY
From next July, the DCJPY will be used by the telecommunications company Internet Initiative Japan (IIJ) to settle clean energy certificates, which attribute a “environmental value” to energy derived from non-fossil fuel sources.
The companies intend to use blockchain technology to make these tradable. DCJPY tokens will be backed by bank deposits and will be linked to bank accounts to allow for seamless transaction settlement.
According to DeCurret, this increases security by combining banks’ existing know-your-customer (KYC) and anti-money laundering (AML) practices with a traceable blockchain ledger, distinguishing it from stablecoins, which are cryptocurrencies whose values are often tethered to fiat currencies.
DCJPY is also expected to significantly reduce payment settlement expenses when compared to the current system of direct debits and transfers.
If cashless business entities can also become truly digital by using the DCJPY network, there will be enormous cost savings for all stakeholders involved in payment settlements.
DeCurret CEO Satoshi Murabayashi
The announcement would place Japan in line with other countries that have experienced a growth in the number of digital currencies backed by bank deposits and blockchain technology.
According to the DCJPY White Paper, the currency “has a high potential for coexistence” with the central bank’s planned digital currency.
DeCurret has been at the forefront of the launch of a digital currency, anchoring negotiations at a consortium of Japanese corporations eager to capitalize on the technology.
The consortium, which includes Mitsubishi UFJ Financial Group Inc (8306.T), Mizuho Financial Group Inc (8411.T), and Sumitomo Mitsui Financial Group Inc (8316.T), has been meeting on a regular basis to discuss how to develop a common settlement infrastructure for digital payments.
