Study group formed in Japan to review digital currency settlement

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A study group comprised of leading banks and digital currency exchanges in Japan has been set up to examine digital currency settlement, in a move that could pave the way for more extensive use of digital currency and blockchain in mainstream payments.

The group was founded by DeCurret exchange, and includes representatives from three of Japan’s megabanks—Mizuho Bank, MUFG Bank, and Sumitomo Mitsui Banking Corporation—as well as other companies and stakeholders.

Chaired by a former head of payments and settlement systems at the Bank of Japan, Hiromi Yamaoka, the group is expected to meet several times a month to examine challenges and solutions for digital currency and settlement.

In a statement announcing the launch of the group, DeCurret said there was a need for cooperation across the payments industry to take full advantage of digital currency and blockchain tech.

In recent years, expectations have been growing about the efficiency and convenience of digital currency settlements befitting digital society against backdrops such as businesses issuing digital currencies using distributed ledger technology and actions taken by some central banks.

At the same time, concerns are emerging over issues including privacy protection, crime prevention measures, and technology risks. These have resulted in the needs for a direction for the realization of valuable digital currencies in Japan.

The study group follows recent updates to digital currency laws in Japan, which have brought security tokens and ICOs under the remit of Financial Instruments and Exchange Act for the first time, introducing formal regulation on par with other financial instruments and asset types.

One of Japan’s formally regulated digital currency exchanges, DeCurret was founded in 2018. A new share allocation in May saw the firm raise a further $25 million in capital, earmarked for funding further expansion of their services.