Most centralized governments have been debating on the matter of CBDC or a Central Bank Digital Currency project. However, the association of the private banking sector in Japan is ready to launch the new digital yen before the end of the current year. The group of banking units that include names like Mizuho, MUFG, SMBC, and Japan posts has decided to venture into the blockchain industry.
The banks that have joined hands for making the digital yen project a reality are working under the supervision of the Digital Currency Forum. The crypto firm or consortium has 47 registered partners from the related industries. The new centralized currency has been named Digital Currency JPY or DCJPY and uses a two-tier permissioned blockchain protocol.
The digital yen project called DCJPY used the Proof-of-Concept consensus model. The consortium has released a White paper recently that explains the technical workings of digital currency. The idea behind this centralized token is to deploy the digital ledger technology and manage it through the centralized banking system.
While the concept has been put together and executed by the independent banking sector, the government agencies of Japan have also decided to take an interest in the project. According to news, the Ministry of Finance, Central bank of Japan, and Financial Services Authority has decided to play the role of supervisors and observers.
Digital Currency Consortium of Japan
The Digital Currency Consortium has claimed that the first every digital yen is going to be become public by 2023. The firm also shared plans for several interesting use cases for the CBDC that include retail payments, commercial transactions, regional coins, electric power-based P2P trading, and NFT trading, among others.
At the initial stage, the consortium is planning to deploy the DCJPY in the supply chain industry that will automate the transactions to increase efficiency. The financial critics in Japan are uncertain at this point if this novel cryptocurrency by the retail banking system will be able to create a sizeable impact on the Central Bank of Japan to invest in a new CBDC project.