The Bank of Japan (BOJ) is studying how to cope with the emergence of a digitalized economy. Consequently, this has triggered the BOJ to think not just of a digital yen but also the possibility of cryptocurrencies in the future payment mechanisms of the country.
The Cashless Revolution In Japan And How It Leads To Cryptocurrencies
Last year, the proportion of cashless payment transactions in Japan rose to 42.8%, with credit cards and debit cards, mobile applications, and QR code-based systems contributing to that total. The BOJ has been testing a central bank digital currency (CBDC) since 2023. It has worked with major banks like MUFG, SMBC, and Mizuho, as well as smaller regional banks and fintech companies.
While no official launch date for a digital yen has been set, BOJ officials, including Executive Director Kazushige Kamiyama, emphasize the need for a payment system that is convenient, efficient, and secure. The increased popularity of digital payments, especially in the younger consumers indicates the increasing level of comfort with a lack of paper money.
Japan reached the target set by its government of achieving 40% cashless transaction a year ahead of schedule. Remarkably, there also appears a new trend, which is the use of cryptocurrencies as a potential alternative to the traditional money.
Recently, the vice governor of BOJ, Shinichi Uchida, indicated that in case people lose confidence in the yen, digital currencies such as cryptocurrencies or stablecoins may replace the role of the Japanese currency in circulation. Even though Uchida explained that cash is clearly not about to disappear in the near future, his statements reflect a change in the minds of Japanese financial leaders.
Japan’s Reserved Approach to CBDC
Even the country with a rigorous approach to the cryptocurrency business is becoming a bit more open, especially to stablecoins, which are cryptocurrencies pegged to traditional currencies, such as yen or US dollar. The crypto market in Japan is also on the rise, with more than seven million active crypto accounts as of December 2024, as compared to five million early in the year, as data shows.
Bitcoin and Ethereum are still trending; however, stablecoins are finding more applications in cross-border payments and as remittances. The current trend suggests that Japan is entering an era where more digital payments can be used, and one of them is cryptocurrencies.
France May Explore Bitcoin as a Strategic Reserve Asset
Earlier, Jan3 founder, Samson Mow, met with French legislator Sarah Knafo to discuss Bitcoin and cryptocurrencies’ potential in Europe. Knafo, a member of the European Parliament, invited Mow to France to explore how the country could embrace Bitcoin as a strategic reserve asset and create supportive regulations.
Mow expressed enthusiasm about sparking a wave of Bitcoin and cryptocurrencies’ adoption across European nations, starting with France. In a post on social media, he shared his excitement about the meeting, while Knafo praised Mow’s expertise, noting his role in advising El Salvador’s president on Bitcoin adoption.
France is showing growing interest in Bitcoin. Earlier this month, Blockchain Group, a Paris-based company, purchased 624 Bitcoin for $68.7 million, bringing its total holdings to 1,471 Bitcoin.
This move made it Europe’s first firm to hold Bitcoin as a treasury asset. The state-owned bank of France, Bpifrance, also indicated in March its intentions to invest $27 million in cryptocurrencies as efforts to promote local blockchain projects.
Increasing Institutional Demand And Cryptocurrencies Adoption In Europe
These actions are indicators that France is going to allow the use of digital currencies in its money system. Nevertheless, there are problems. As some experts, such as Elisenda Fabrega, note, Europe is lagging behind other regions in the adoption of cryptocurrencies.
Fabrega says that this can be put down to stringent rules, limited establishment, and un-maturity of this market. MiCA, the European Union crypto framework, was fully implemented in December 2024 after years were spent on development. Yet, it continued to present an obstacle to mass adoption, having been described as an attempt to create certainty that would discourage innovation.
The visit of Mow to France may open up to greater negotiations on how Bitcoin can be used as a financial instrument in this country and others. The fact that he has been part of the experience with El Salvador, which legalized Bitcoin as a tender, makes him one of the experts in convincing other states to adopt the currency.
