GMO Aozora Net Bank, a Japanese financial institution, is planning to issue a blockchain-based digital currency called DCJPY as early as July 2023. This project is the first of its kind in Japan and is part of a corporate consortium with over 100 members. DCJPY is a currency backed by deposits and will use blockchain technology for instant transfers and settlements, bypassing traditional bank data systems, which reduces costs. The bank envisions the currency’s use for payments between companies.
Internet Initiative Japan (IIJ), a network solutions provider, will be the first user of DCJPY. IIJ plans to digitize certificates indicating that its data centers run on renewable energy and are free of fossil fuels. This digital currency will be used for settling purchases and sales of these certificates. The platform for trading DCJPY will be built by IIJ group unit DeCurret DCP, with IIJ paying fees to DeCurret DCP and GMO Aozora. GMO Aozora aims to get both big and regional banks to adopt this currency.
The project has garnered support from a consortium launched by IIJ in 2020, which has grown to include over 100 businesses and organizations. This consortium includes Japan’s three largest banks—Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corp, and Mizuho Financial Group—as well as companies like NTT and East Japan Railway. Japanese government bodies, such as the Financial Services Agency, the Finance Ministry, and the Bank of Japan, are also involved, with DeCurret DCP serving as the administrative office.
Japan’s big banks are increasingly looking into issuing stablecoins, which are pegged to legal tender like the yen to avoid major value fluctuations. New legislation that took effect in June defines stablecoins. Japanese institutions are eager to tap into the growing global market, which is estimated at about $124 billion. Mitsubishi UFJ Trust and Banking recently spun off Progmat, a stablecoin and digital securities platform, with investments from several financial institutions and IT service company NTT Data. Progmat is collaborating with Mizuho Financial Group and others, indicating cross-industry efforts to launch stablecoins.
