The Bank of Japan calls for increased efforts to promote the development of digital currencies in order to transition to a 'cashless society'

According to a report by Golden Jubilee, officials from the Bank of Japan are intensifying their calls to keep up with the rapid development of digital currencies, which may accelerate Japan's transition from a cash free payment system where cash is king. According to Japanese government data, the proportion of cashless payments in the country has increased from 13.2% in 2010 to 42.8% in 2024, exceeding the government's target of 40% one year ahead of schedule. Although Japan lags behind globally in payment technology, the increase in cashless transactions is forcing policymakers to ensure they are prepared to adapt to changes in public preferences for payment and settlement methods. This includes issuing central bank digital currencies (CBDCs). Kazushige Kamiyama, Executive Director of the Bank of Japan, stated that although the issuance of paper currency in Japan is still high, with the rapid development of digitization, the usage of paper currency may significantly decrease in the future. Therefore, Japan must consider what measures can be taken now to ensure that its retail settlement system is convenient, efficient, universally available, safe, and resilient. "Bank of Japan Deputy Governor Masaichi Uchida said that CBDC may become a" key component of infrastructure "shaping Japan's payment and settlement system in the future, but he emphasized that Japan's demand for cash is not expected to disappear in the short term.