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".
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.
© Sirwinchester
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.
Couldn't agree more.
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.
Brilliant.
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.
whoooa... great post! thank you.
Wow exciting news!
The banking system will adapt and change its business if they see that changes are inevitable
Very interesting that banks and even governments are getting involved in crypto. Of course, it will be to their advantage but as long as we can swap whatever coin on decentralized exchanges for their coin it will make crypto in general more widely accepted. I'm waiting impatiently to see where the Mr. Robot series is going with their e-coin VS Bitcoin theme.
Good post, now off to "Universal Settlement Coin"
Thanks
this can be very interesting !!!
Japan dominates almost all sectors. From manufacturing to finance. J Coin will thrive. I wonder how this will affect BTC and other alt coins.
Its a move to make money in 2020 for Japan as most people will prefer to have crypto all saved up for the Olympics in Tokyo
Interesting news! Japan is making amazing steps.
It seems like there are a lot of specifics that still need to be simmered out but the relationship between Japan and cryptocurrecies right now can't be ignored.
The country is regularly making headlines and it would be fair to consider their economy the most mobilized for implementing complete integration.
Nice work putting this together, appreciate the read.
Digital currency is working very fast. Digital currency will be ahead in the coming time.
Wow, very cool news, thank you !
Now another USD/YEN trading option ! very cool
thanks for the post !!!!
Read More, Reason More ... JTS
Not sure how it is aiming to differentiate itself from other Alt coins other than that it's originating from Japan.
Japan is the best
pretty brilliant if you ask me. upvoted & followed :)
These moves by the worlds states should be expected, but exactly how it pans out is unknown. We will have to keep dedicated and fighting for the better amongst the blockchain options.
Interesting move by the Japanese government, but it undermines the core tenants of cryptocurrency, namely, a decentralized and trust-less medium of exchange and storage of value. It appears to me that the authorities have realized that an enormous wave of change is approaching and are keen to maintain a degree of control over the country's wealth and its position within the global economy. Further, the fact that this is a reactionary move means that the government is trying to play catch up in an environment where the technology is beginning to develop at a blistering pace; and governments by their very nature, tend to get bogged down by bureaucracy.
Soon every large economy country will publish their own cryptocurrency.
Till then pls wait and mining existing cryptocurrencies. and be rich.
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Japan is getting ahead of the curve in Bitcoin and cryptos, smart..
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