Japan Post Bank is preparing to launch a blockchain-based digital yen, DCJPY, backed by deposits, in an effort to enhance the efficiency of financial transactions for its customers. The bank has confirmed plans to roll out the tokenised currency by the end of fiscal year 2026, with the digital yen to be supported on a one-to-one basis by fiat deposits and linked to customers’ savings accounts.

The service will enable customers to open digital wallets, convert their savings into DCJPY, and settle transactions instantly, including digital securities, real estate, and other blockchain-based assets. Japan Post Bank, which holds roughly 190 trillion yen (over $1.2 trillion) in deposits and is majority-owned by the Japanese government, expects the initiative to reduce transaction costs and facilitate faster purchases of financial products. Additionally, the system is designed to allow for the rapid distribution of government subsidies directly to citizens.

DCJPY is being developed in partnership with Japanese FinTech DeCurret DCP, a subsidiary of Internet Initiative Japan. Unlike traditional stablecoins, DCJPY operates under Japan’s deposit insurance protection, offering additional security and regulatory oversight for users.

The move follows similar developments by GMO Aozora Net Bank, which introduced a digital yen service in 2024. These initiatives reflect a wider trend in Japan’s banking sector to adopt blockchain technology, aiming for greater transparency and efficiency.

Internationally, Oversea-Chinese Banking Corporation (OCBC) in Singapore has launched a US$1 billion commercial paper programme using blockchain here, and in the US, Wyoming has become the first state to issue a blockchain-based stablecoin, the Frontier Stable Token (FRNT), backed by US dollars and short-duration treasuries. OCBC confirmed that JP Morgan will act as the sole dealer for the programme through its Digital Debt Service application here, built on the Kinexys tokenisation platform. FRNT is designed with a legislative remit for two per cent overcollateralisation, further enhancing stability for token holders.

Japan Post Bank’s digital yen project signals a significant shift in financial services, combining traditional banking safeguards with the speed and transparency of blockchain technology.

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