Japan’s banks launch digital coin – but blockchain is nowhere to be seen

Japan’s goal of creating a cashless society has got one step closer with the release of J–Coin Pay — a smartphone-based digital wallet that uses QR codes to provide payment services.

Despite the name, however, J-Coin has even less to do with cryptocurrency than the recently announced JPMCoin, which in cryptocurrency terms was dismissed by many as a pretender.

The wallet app, which became available to Japanese citizens on March 1st, is the result of the collaboration of sixty banks, and represents a way to complete all payment-related processes, including sending, receiving, and paying money, from a single dashboard.

Users can move funds from their accounts at participating financial institutions, including Mizuho Bank, to their J-Coin Pay accounts and then transfer these funds to other users via telephone numbers and QR codes, without paying any fees.

Crypto yen when?

The absence of blockchain in this process may come as a surprise. Japan is long rumoured to have been planning a digital currency pegged to the Japanese Yen, and some speculated that J-Coin, which has been in the works for over a year, would eventually introduce the world to the marvels of cryptocurrency at the Tokyo Olympics in 2020.

Instead, J-Coin pay seems to be intended as a way to wean Japan off its reliance on paper cash. Partnerships with shops, restaurants, and some of the biggest financial institutions in the country will help the app build Japan’s "cashless vision" of a society where anyone can deposit, withdraw, and move funds anywhere at any time. Specifically, the plan is to double the percentage of consumers using cashless payments to 40% by 2025.

"With the new J-Coin Pay bank digital currency platform, Mizuho Bank and other participating financial institutions will work together towards the Japanese government’s goal of achieving a cashless society." stated the official announcement.

With hopes dashed by J-Coin, those expecting a crypto yen are now looking to Rakuten — the Japanese equivalent of Amazon — which is thought to be planning the launch of its own cryptocurrency. A clause in the company’s February earning reports revealed that the April update of its Rakuten Pay payment application would include "all payment solutions embedded into one platform", leading speculators to suggest it could finally be time for the ecommerce giant to release its own coin.

Rakuten, which owns the Japanese exchange Everybody’s Bitcoin, has long been associated with cryptocurrency, and first accepted bitcoin for payment back in 2015. In March last year, CEO Hiroshi Mikitani announced his plans to release Rakuten coin, but nothing has been heard since.