Cash is king in Japan, but the nation’s biggest banks are hoping to change that. A new report out of The Financial Times reveals that Japan’s central bank is planning to launch a cryptocurrency called J-Coin, one that will be based on blockchain technology. Assuming everything goes according to plan, J-Coin will co-exist alongside yen with a one-on-one value.
Per the FT‘s report, Japan’s banks are aiming to launch J-Coin before the 2020 Tokyo Olympics, giving it only a couple years to get the currency established. This would be an effort to get Japan’s population to gravitate away from cash, which continues to dominate the nation’s society to a greater degree than that of other first world nations.
It is possible the effort won’t go the way it’s planned, and perhaps J-Coin ultimately won’t be launched at all. Though there are some benefits to digital currency, such as eliminating the cost associated with paper bills and coins, there are also many potential downsides. One big criticism surrounding digital currency like bitcoin is the degree to which governments can track consumers.
Cash is more or less anonymous, at least in certain circumstances. Someone particularly worried about their privacy can exclusively use cash to avoid establishing a paper trail; it can exchange hands without any transaction being recorded by a bank. That’s good from a privacy standpoint, but problematic for governments.
Black markets thrive on cash, including drugs and weapons trades, and shifting toward a trackable currency would help officials combat that problem. That’s not to say that anonymous digital purchases can’t happen; bitcoin initially grew in popularity due to its anonymous nature and the way that helped online black market customers and vendors.
SOURCE: Financial Times