Japanese Banks Readying For J Coin, a New Mobile Currency

It wasn’t so long ago when we heard about a growing number of countries preparing for region-specific—even country-specific—cryptocurrency offerings. We heard about Russia’s, and China’s, and even Estonia’s. We also heard about China’s plans to limit or ban bitcoin exchanges. Now, word has emerged that Japan is looking to join the cryptocurrency stakes as well with its own digital currency: J Coin. The reports even suggest that J Coin could be ready to go by 2020.

A group of banks has joined in the hunt on this one, including two of the biggest consumer banks in Japan, Mizuho Financial Group and Japan Post Bank. The group in question got the green light from government officials to start getting J Coin ready for prime time, and ahead of the primest time of all: the 2020 Summer Olympic Games to be held in Tokyo.

The specifics aren’t fully assembled yet—the whole process only recently got started—but it’s expected to be used like a yen, at retailers through quick response (QR) code payments or on a peer-to-peer (P2P) basis via a mobile handset. The J Coin is so close to a yen in nature that it will even be valued like it, at one yen per J Coin. It’s so close, in fact, that certain outlets will even convert J Coin to yen on demand.

Japan isn’t tying the J Coin to certain scarcity measures like most cryptocurrencies do, but rather, it’s almost issuing the equivalent of digital yen. That’s going to mean more yen overall in the market, which may in turn have a direct effect on what users can buy in the country itself.

It’s a basic inflationary tactic; if Japan isn’t planning to release a lot of J Coin, this probably won’t be a problem—there were over 103 trillion yen in circulation as of 2015, reports note, so even a million wouldn’t be much—but if it puts out a lot of J Coin, it could be a serious problem.

That’s likely why Japan is looking to the banks to manage this; the banks are likely acutely aware of what effect J Coin could have on the yen overall, and will work to manage that effect accordingly while still providing users the means to access this new cash digitally.