Japan’s banking industry will be launching ‘J-Coin’, a new digital currency that is the digital equivalent to the Yen.
The banks in Japan have been collaborating to create J-Coin, a crypto version of the Yen that they hope to launch by 2020 -
just in time for the Tokyo olympics. Unlike most cryptocurrencies, the J-Coin will be pegged to Japan’s national currency, the Yen, this means that unlike Bitcoin and most other cryptocurrencies, J-Coin will be centralized and Japan’s government will be able to play a role in its regulation and economic policy.
Simon Dixon, CEO of
BnkToTheFuture.com, commented to Coinidol.com:
“Central bank digital fiat is convenient and stable for spending in a local economy, but you don't legally own the money like cash, it can be censored when you spend it on something the government does not like and it will be subject to an inflationary monetary policy encouraging debt over savings. This will help people understand the value of Bitcoin which the user can own, spend as they wish, and ensure it follows a deflationary monetary policy where their wealth can increase over time. The end result is people will spend convenient but inflationary money (J-coin) and save less convenient Bitcoin outside of government control. Digital fiat like J-coin makes Bitcoin stronger."
With J-Coin, consumers will be able to withdraw Yen from their bank account, convert it to J-Coin via a smartphone app, and then they will be able to use J-coin at: convenience stores, restaurants, and any other participating business.
If successfully implemented, the new digital money will reduce the amount of fiat in circulation, making business more efficient because the costs associated with handling cash, including transportation and auditing will be greatly reduced due to the lower volume of cash concurrent with J-coin . Banks look forward to direct bank transfers, the elimination of commission fees from remittances between individuals, and cheaper overseas transfer of money.
But what may be even more valuable to Japan’s Banking industry than a more efficient system of money, is the valuable data they will be able to mine via J-coin. Because cryptocurrencies incorporate blockchain technology, the banks of Japan will have access to a ledger of every payment that every J-coin user has ever made or received. The banks in Japan plan to harvest Consumer’s shopping records and related information; they then will share their consumers/customers data amongst each other to enhance and form their marketing and pricing strategies.
Although a centralized digital currency with lack of privacy is not exactly what the crypto community stands for, I think Japan’s J-coin goes to show that blockchain technology is the future. And for the banking and finance industries and economies around the world to operate more efficiently, we have to ditch paper money--the few examples listed previously goes to show that there are just too many costs associated with handling cash - It’s just not the most efficient way to operate in 2017. I’m sure other nations will be closely watching Japan’s development and launch of the J-coin. If successful, this could set a precedent for banking, finance, and economies around the world.