Japan Plans To Launch Their Own Digital Currency "J-Coin" By 2020 !

Japan is one of the world leaders in technology - especially FinTech.

The country embraces Blockchain Technology and cryptocurrencies, and even accepted Bitcoin as legal payment method earlier this year. Countless large retailers and stores in Japan already accept cryptocurrencies for payments.

So it's no surprise that the Japanese Government has now decided to take the next step towards a cash-less financial system. They have realized that digital currencies are the future - and that they will grow to become an essential part of banking in the future.

Today, Japan has announced to begin eliminating cash - and introduced their new digital currency, "J-Coin".



The news were released in an article from the Financial Times, stating that Japan aims to "streamline the financial system" this way, and introduce a new cash-less system before the Olympic Games in Tokyo 2020.
The so-called J-Coin will be a product of cooperation between different major Japanese banks - amongst them Bank Mizuho Financial Group and Japan Post Bank. The project is also supported by the Japanese central bank.
And this comes just a few days after Japan dominated the global bitcoin exchange market with a 50.75 percent market share!


J-Coin and Japanese Yen

Instead of replacing the traditional Japanese Yen with the new J-Coin, the plan is to have both currencies function in tandem.

The J-Coin would be exchanged at a 1:1 ratio, and the exchange service itself would be free.
Although the J-Coin is planned as a digital currency, it's not quite clear yet if the system will in fact be based on Blockchain technology. The Bank of Japan recently stated that they don't consider Blockchain technology ‘mature’ enough to manage transactions in everyday life.
The currencies are then supposed to be used for payments and transfers through a mobile app.


Problems to overcome

Interestingly, the Japanese economy functions 70% on cash - this number is much larger than other developed nations where digital transactions have replaced cash.
Keeping this statistic in mind, it might be quite difficult to transition to a "cash-less" financial system in just over 2 years time. The banks in charge of the project estimate that the new digital currency could add ¥‎10 billion ($90 million) to the economy, which could otherwise be lost due to undocumented cash-in-hand work or black market transactions.

Another problem is the privacy - the system may be free to use for Japanese citizens, but the banks get to collect large amounts of personal data instead. The system saves the purchase behaviour of users and could use this data for their own advantage - for example to adjust the prices according to demand.


We will see how the country will adjust to the new financial system in the future, and how quickly they will be able to setup the new digital currency system!

And this isn't the only new project that introduces a new system of digital currency - other countries like Sweden, China, Estonia, Russia and Ecuador are thinking about doing the same. And even some leading banks like HSBC, Barclays, UBS, and Santander are teaming up to create the "Universal Settlement Coin", a digital currency to allow banks to trade easily with each other.

Images: 1, 2, 3, 4, Sources: 1, 2, 3, 4

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So what happens when speculators come in and boost their crypto currency 30% in a day?

Excellent question. Much like they do with the yen, the BOJ would have to manage the j-coin - in this case by releasing massive amounts of supply to keep the price stable. Of course when people panic and sell the the BOJ would have to support the market with bids. The point is the BOJ would have to actively maintain a peg with the yen.

I think this kind of cryptocurrencies are not interesting for global community and only will be used for governments and main banks requirements.

That's a risk in any industry, and is all part of free markets, the point is that a genuinely free market is sufficiently resilient to weather speculators. That being said, the idea of national cryptos leaves me sceptical, especially coming from a country with such wide state intervention as Japan.

To be honest i don't know if this is good or bad news, taking a decentralized technology and driven by community and give it back to control of the government
Thanks for the info!

I agree with you, Japan and another countries want to keep the control with the main banks for big investments and they will develop their own cryptocurrencies so they have a lot of money to invest in blockchain technology

The thing is that the blockchain is public so i don't know what they will do with it, lets wait and see

LEt's Hope it never Falls Back

In my opinion, all countries will gradually switch to non-cash settlement. The future calls for crypto currency.

This actually worries me a some. If the BOJ supports a crypto coin that is pegged to the yen, then the BOJ is actually staking its credibility on that peg. The BOJ will have to defend that peg, bidding into weakness and selling into strength in sufficient amounts to maintain parity. Maintaining a peg has a real cost - sometimes central banks have to absorb huge losses to maintain currency pegs. If bitcoin and the other alt coins are freely traded in Japan, they provide a easy way for individuals to scape the j-coin and drive up the cost of the BOJ's defense of the j-coin during times of trouble. Would it not be easier for Japan to make it much harder to trade in other cryptos? Particularly in times of trouble when the j-coin needs support? Seems like the j-coin could create an incentive for Japan to come down hard on cryptos.

@sirwinchester do you mind if I share this article to my blog off-site? I would run the first paragraph and link back to your article on STEEMIT and your profile. Let me know.

Sure, go ahead! Thanks for using my work

The pleasure is mine. Thank You. If there are any others you would like to share I am always looking for quality content. All will link back your article and profile.

So Japan switches its entire economy to Bitcoin and J-coin, then gets rid of all its debts by printing Yen ad nauseum until the old currency becomes useless.


Best thing its decentralized anyone can able to apply for a witness or mine it. I hope other country will do the same too. U.S President Trump already announce its si

Japan is becoming one of the strongest leaders in the crypto world! Thanks for sharing, keep up the great content.

Interesting news! Japan is making amazing steps.

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