While governments and banks around the world are critical of cryptocurrencies, Japanese banks seem to have garnered interest in digital currency with reports in the local media indicating that a consortium of global and regional Japanese banks will be launching J Coin.
Global and regional Japanese banks have joined forces with an eye of launching J Coin by 2020. The consortium includes megabank Mizuho Financial Group and Japan Post Bank as well as a number of smaller regional banks with the coin to be pegged to Yen. Reports also mention that J Coin will be usable for electronic payments as well as cheap or free international remittance with the banks hoping to fend off fintech giants such as Alibaba or ApplePay.
According to the report on Nikkei, the banks have envisioned a system under which yen could be withdrawn from a bank account and converted to J Coin with a smartphone app. The J Coin can then be used for payments at convenience stores, restaurants and any other participating businesses. This suggests banks are basically tokenizing yen, but whether they retain any control over the token after it is issued is somewhat unclear at this stage.
While there are no concrete reports on the exact technology to be used by J Coin, Mizuho has been working in a partnership with IBM for some time in efforts to create a digital currency by using Hyperledger.They tested it in a trial during December 2016 where one yen equaled one Mizuho token, with individuals successfully able to make payments in the digital currency.