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Inside the Company Building Japan’s Multistakeholder Digital Yen

The Tokyo metro has a unique – and sometimes frustrating – feature. Unlike most subway systems in the world, it is operated by several different companies and a branch of the municipal government, which often means you need different tickets for different lines.

Japan’s digital yen might look a lot like that.

Tokyo-based DeCurret, with 50-odd employees, is leading the design of the digital yen and coordinates the Digital Currency Forum (DCF), a consortium of 74 of Japan’s biggest banks and firms that look to roll out the digital currency.

Under the proposed model, commercial banks will issue the digital yen as a liability on their books, much like run-of-the-mill deposits, according to a white paper released in November.

Decurret will set up a platform that banks can use to issue the digital currency, as well as plans to issue the digital yen by the end of 2022, with trials set to start as soon as January.

In a country where the government is often sluggish but the private sector has a deep history of innovation, it is not surprising that entrepreneurs are stepping in to design a digital currency that will smooth corporate finance.

Read more: Japanese Consortium Plans to Issue Bank Deposit-Like Digital Yen by End of Next Year


DeCurret was born out of the Internet Initiative Japan, the country’s first internet service provider (founded in 1992), now listed on the Tokyo stock exchange. IIJ not only owns 40% of DeCurret but it is the source of much of its management team, Yoshiaki Kuwata, who leads international business development at DeCurret, told CoinDesk. DeCurret’s chairman, Satoshi Murabayashi, is also an executive vice president at the IIJ. Both IIJ’s chief operating officer and chief financial officer are directors at DeCurret.

The IIJ connection helped DeCurret secure funding, but also convinced major firms to join the digital currency forum, Kuwata said.

The member list includes MUFG Bank, Sumitomo Mitsui Banking Corp., Mizuho Bank, Japan Post Bank, as well as industrial behemoths including Nippon Telegraph & Telephone Corp., East Japan Railway and Mitsubishi Corp., as well as local governments.

The company also has connections to the national government, with the former chairman of the Financial Services Agency, Toshihide Endo, an adviser. The Financial Services Agency, Bank of Japan and three ministries are also sitting in on the discussions.

Stairway to digital currency

Since its founding DeCurret had its eyes on launching a digital currency, but due to stablecoin regulation in Japan the company started out with a crypto exchange business, Kuwata said. The thinking was that working on blockchain technology would further DeCurret’s digital currency ambitions, regardless of the specific use case, according to Kuwata.

It’s been three years since the exchange started but it has yet to turn a profit, Kuwata said, citing high competition. Big exchanges that have been in the market for a while have seen rising trading volume and profits, he said. But this trend is “more about existing traders who are increasing their volumes,” rather than newcomers, so new entrants are having a hard time, he said.

Crypto exchanges in Japan have had a hard time turning a profit, with many struggling to keep up with compliance rules. Taxes of up to 55% on gains have spurred some exchanges to pack their bags and head overseas.

Read more: Japan’s Crypto Exchanges Grapple With ‘Travel Rule’ as Deadline Looms

The digital yen

DeCurret’s digital yen will be issued by different banks using its platform, for which the company will be charging the banks. The ledger of each bank will come together in the so-called Common Area, where a central ledger of the digital yen’s supply will be kept, according to the white paper. In the Business Process Area, another environment, users will be able to interface with the digital yen through applications.

In its initial stages, the digital yen will be a product for corporates looking to reduce costs in large scale B2B transactions. Within the next two years, DeCurret’s target is to “have a few customers who are really using this platform as a business and paying us fees,” Kuwata said. Down the line, the company will also work as a settlement service between individuals and businesses, he said.

The various subcommittees in the 74-member development association are working to come up with use cases for the digital yen.

DeCurret has been working with the BoJ and other government agencies to set up a regulatory system, and they have “sort of come up with a legal scheme which would allow private banks to issue the coins,” Kuwata said.

The central bank is also looking into a digital currency, but DeCurret doesn’t view this exactly as competition, Kuwata said. A privately issued digital yen can coexist with a CBDC, much like right now where central banks coexist with private banks, and Tokyo’s private metro lines coexist with the municipal ones.

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