FILE PHOTO: Clouds gather over the city skyline during sunset in Tokyo, Japan July 23, 2021. Picture taken July 23, 2021. REUTERS/Edgar Su/File photo
(Reuters) -A group of Japanese firms will issue a digital currency by July 2024 for the transaction and settlement of clean energy certificates, cryptocurrency exchange DeCurret said on Thursday.
GMO Aozora Net Bank will issue the yen-based digital currency, called "DCJPY", which will operate on a network launched by DeCurret.
From next July, DCJPY is intended to be used by telecommunication firm Internet Initiative Japan (IIJ) for the settlement of clean energy certificates, which assign an "environmental value" to energy procured from non-fossil fuel sources.
The companies plan to make these tradable using blockchain technology.
DCJPY tokens will be backed by bank deposits and are intended to link with bank accounts to enable the seamless settlement of transactions.
DeCurret says this improves security by using banks' existing know your customer (KYC) and anti-money laundering (AML) practices alongside a traceable blockchain ledger and distinguishes it from stablecoins, cryptocurrencies whose values are typically pegged to fiat currencies.
DCJPY is also hoped to drastically lower payment settlement costs as compared to the existing system of direct debits and transfers.
"If cashless business entities can also become truly digital by using the DCJPY network, there will be enormous cost savings for all stakeholders involved in payment settlements," DeCurret CEO Satoshi Murabayashi said in the DCJPY White Paper.
The launch would align Japan with other countries that have seen an increase in the number of digital currencies backed by bank deposits and block-chain technology.
The DCJPY White Paper, released Thursday, says DCJPY "has a high potential for coexistence" with the central bank's planned digital currency.
DeCurret has been spearheading the launch of a digital currency by anchoring discussions at a consortium of Japanese firms keen to tap the technology.
The consortium, which includes megabanks Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc, has been meeting regularly to study ways to build a common settlement infrastructure for digital payments.
(Reporting by Leika Kihara and Anton Bridge; Editing by Krishna Chandra Eluri and Simon Cameron-Moore)
