A consortium of banks, led by Mizuho Financial Group and Japan Post Bank has won support from the Japanese Central Bank to launch an electronic currency, the J Coin.
The Government is on a mission to reduce cash transactions in Japan. Currently 70% of the value of all transactions is made in cash; J Coin wants to offer a solution consumers and enterprise will trust.
Offered on a 1-1 basis with the Yen, J Coin will allow customers to pay for things through an App on their smart-phones. The service would be provided for free, encouraging customers to move away from cash and attracting small business to adopt the method. In return, the banks would have access to detailed customer spending patterns, crucial in the new era of open-source banking.
By reducing the costs of cash handling and transactions, banks have privately estimated the J Coin could add 10 billion Yen to the Japanese economy.
This adds to the growing body of new technologies influencing the financial sector.