A group of Japanese banks seems to have a new plan for their country’s payment services. It looks like they have managed to get the approval from the Japan’s central bank to introduce a completely new digital currency called the J Coin.
The group of banks is being led by Mizuho Financial Group and Japan Post Bank and their plan is to make the J Coin convertible on one to one basis, and simultaneously would be a great means of analyzing spending habits of clients for the banks.
Yasuhiro Sato, president and chief executive officer of Mizuho Financial Group said in an interview: “I think this electronic money is quite ahead of [credit and debit] cards because when you use the cards the shops pay a certain fee.”
All of this was prompted by the dangers of Alibaba’s Alipay service that was introduced to Japan recently, as the Japanese bank consortium is worried that the data collected from the Japanese consumers will be sent to China where it will be analyzed for the purposes of further sales.
The new digital currency from Japan is meant to be used to fight the ‘cash dependency’ that is prevalent among Japanese people. While the average developed country has the average dependence on cash reduced to 30%, Japan is still very high on that scale at 70% of all transactions.
Mr. Sato also said: “We like cash because Japan is a very safety-conscious country. But cash is not so productive so we have to change the structure from cash to electronic money.” This is in accordance with the recent estimate that the new digital system could possibly add ¥10bn to the Japanese economic status, as it would directly affect the costs of handling cash money and also fees for consumers and retailers both.