Japan's shift to cashless society prods BOJ call for payment innovation
TOKYO, June 11 (Reuters) - Bank of Japan officials are ramping up calls to keep pace with rapid developments around digital currencies that may accelerate a shift to cashless payments in a country better known for its belief that "cash is king."
Once seen as a society favouring physical currency, Japan saw the ratio of cashless payments rise to 42.8% in 2024, up from 13.2% in 2010 and hitting the government's 40% goal a year earlier than targeted, government data showed.
While Japan is a global laggard on payment technology, the increase in cashless transactions is forcing policymakers to ensure they are ready to adapt to shifting public preference on payment and settlement means.
This includes the option of a central bank digital currency (CBDC). While no decision has been made on whether to issue a digital yen, the BOJ began a pilot programme for developing a CBDC in 2023, and has been consulting with private firms and the government on its framework and design.
"Although banknote issuance remains high in Japan, usage of notes could fall significantly in the future amid rapid digitalisation," BOJ Executive Director Kazushige Kamiyama told a meeting last week with private firms on the pilot programme.
"As such, Japan must consider what steps it can take now to ensure its retail settlement system is convenient, efficient, accessible universally, while being safe and resilient."
BOJ Deputy Governor Shinichi Uchida said a CBDC may become "a critical piece of infrastructure" shaping the future of Japan's payment and settlement systems, but stressed that he did not expect demand for cash to disappear in Japan any time soon.
In his speech on Saturday, Uchida spoke about a hypothetical world in which the yen is overtaken by another instrument - such as crypto assets - as the main form of payment in Japan.
Such a world would not occur as long as the public believes in the BOJ's ability to keep the value of the yen stable, which could come into question if the central bank fails to fulfil its mission of price stability, Uchida said.
"Looking to the future, in a society that has made significant advances in digitalization, there is no guarantee that currency issued by the central bank of a sovereign nation will continue to function as a generally acceptable payment instrument," he said.
CBDCs are back in the spotlight after U.S. President Donald Trump issued an executive order in January banning the Federal Reserve from issuing a digital dollar, seemingly as part of a drive to promote cryptocurrencies and stablecoins instead.
The growing presence of stablecoins, or cryptocurrencies backed by a hard currency, and the potential risk of an erosion in the U.S. dollar's dominance have also piled pressure on central banks to consider issuing their own digital currencies.
The European Central Bank has called for the need to issue a digital euro to respond to Trump's push to promote stablecoins, and develop an electronic means of payment that does not rely on dominant U.S. providers such as Visa.
China is racing ahead with global ambitions to internationalise the yuan with transactions of the digital yuan more than tripling between June 2023 and June 2024.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
37 minutes ago
- The Independent
A look at Boeing's recent troubles after Air India crash
The crash of a Boeing 787 passenger jet in India minutes after takeoff on Thursday is putting the spotlight back on a beleaguered manufacturer though it was not immediately clear why the plane crashed. The Air India 787 went down in the northwestern city of Ahmedabad with more than 240 people aboard shortly after takeoff, authorities said. It was the first fatal crash since the plane, also known as the Dreamliner, went into service in 2009, according to the Aviation Safety Network database. Boeing shares fell more than 5% in pre-market trading. The 787 was the first airliner to make extensive use of lithium ion batteries, which are lighter, recharge faster and can hold more energy than other types of batteries. In 2013 the 787 fleet was temporarily grounded because of overheating of its lithium-ion batteries, which in some cases sparked fires. 737 Max The Max version of Boeing's best-selling 737 airplane has been the source of persistent troubles for Boeing after two of the jets crashed. The crashes, one in Indonesia in 2018 and another in Ethiopia in 2019, killed 346. The problem stemmed from a sensor providing faulty readings that pushed the nose down, leaving pilots unable to regain control. After the second crash, Max jets were grounded worldwide until the company redesigned the system. Last month, the Justice Department reached a deal to allow Boeing to avoid criminal prosecution for allegedly misleading U.S. regulators about the Max before the two crashes. Worries about the plane flared up again after a door plug blew off a Max operated by Alaska Airlines, leading regulators to cap Boeing's production at 38 jets per month. Financial woes Boeing posted a loss of $11.8 billion in 2024, bringing its total losses since 2019 to more than $35 billion. The company's financial problems were compounded by a strike by machinists who assemble the airplanes plane at its factories in Renton and Everett, Washington, which halted production at those facilities and hampered Boeing's delivery capability. Orders and deliveries The stepped-up government scrutiny and the workers' strike resulted in Boeing's aircraft deliveries sliding last year. Boeing said it supplied 348 jetliners in 2024, which was a third fewer than the 528 that it reported for the previous year. The company delivered less than half the number of commercial aircraft to customers than its main rival Airbus, which reported delivering 766 commercial jets in 2023. Still, Boeing's troubles haven't turned off airline customers from buying its jets. Last month the company secured big orders from two Middle Eastern customers. The deals included a $96 billion order for 787 and 777X jets from Qatar, which it said was the biggest order for 787s and wide body jets in the company's.
Reuters
an hour ago
- Reuters
Japan's business mood worsens as US tariff uncertainty takes toll
TOKYO, June 12 (Reuters) - Japan's business sentiment worsened in April-June for the first time in five quarters, a government survey showed on Thursday, a sign uncertainty over U.S. tariff policy was taking a toll on the country's export-heavy economy. An index measuring big firms' business confidence fell to -1.9 in the current quarter, following +2.0 in January-March, Ministry of Finance data showed. Manufacturers surveyed by the government expect recurring profit to fall 1.2% in the current fiscal year ending in March 2026, bigger than a 0.6% drop projected in the previous survey. Automakers and auto parts makers expect profits to plunge 19.8% in fiscal 2025, the survey showed, highlighting their concern over the expected hit from steep U.S. tariffs. The index indicates the ratio of companies that saw business conditions improve from the previous quarter, versus those who saw conditions worsen. A negative reading shows more firms saw conditions worsening.
Telegraph
2 hours ago
- Telegraph
Everything you need to know about the Boeing Dreamliner
How many Dreamliners have crashed? When did the Boeing 787 first come into service? What have been the Dreamliner's most serious incidents? Which airlines operate the 787? How is the 787 Dreamliner different from other aircraft? What other issues has Boeing faced? Is Air India safe? The Air India disaster in which a plane crashed moments after take-off in Ahmedabad is the first time that a Boeing 787-8 Dreamliner has been involved in a fatal accident. However, the aircraft has been beset by problems since entering service in 2011. The US Federal Aviation Administration (FAA) has investigated a number of concerns over the past decade, including faulty batteries and a flight that experienced a sudden drop in altitude. Here's everything we know about the aircraft, with a close look at its safety record over the years. How many Dreamliners have crashed? The Air India incident on June 12 2025 – involving an 11-year-old aircraft – is the first time the 787 Dreamliner has crashed. When did it first come into service? On October 26 2011, the Japanese airline All Nippon Airways (ANA) was the first to fly the Boeing 787 Dreamliner on a commercial service. This was four years after Boeing's original planned launch date, coming in millions of dollars over budget. Since that first flight, the Dreamliner fleet has carried more than one billion passengers across almost 5 million flights. What have been the Dreamliner's most serious incidents? In the early years after entering commercial service, the 787 faced a series of technical problems, including concerns around the safety of lithium-ion batteries. In early 2013, carriers including Japan Airlines and United Airlines reported issues with the wiring near the main batteries in some of their Dreamliners. That summer, a fire broke out on an empty Ethiopian Airlines plane at Heathrow due to crossed wires located under a battery. Norwegian Air also suffered a serious fuel leak due to a faulty valve on a 787, one of a number of problems experienced on the fleet. The airline's vice president later said: 'We're not satisfied with where the airplane is today, flying at a fleet average of 98 percent... The 777 today flies at 99.4 percent [...] and that's the benchmark that the 787 needs to attain.' There have also been concerns around the 787 Dreamliner's performance in certain weather conditions. In November 2013, Boeing issued an advisory for airlines flying the Dreamliner with a General Electric GEnx engine to avoid flying near thunderstorms because there was an increased risk of ice crystals building up on the engines. In March 2024, a LATAM Airlines flight experienced a sudden drop of 300ft of altitude within a few seconds. The plane landed at Auckland as planned, where 50 passengers were treated for injuries and twelve were taken to hospital. A preliminary report suggested the drop was due to the captain's seat involuntarily moving forward, rather than being caused by turbulence or poor weather conditions. Which airlines operate the 787? There are more than 1,100 Dreamliners in service worldwide. More than 50 airlines fly the Boeing 787. This includes many flag carriers such as British Airways, Air France, Emirates and American Airlines. British Airways flies all three variants of the Dreamliner (the 787-8, 787-9 and 787-10). It first added the Dreamliner to its fleet in 2013. How is the 787 Dreamliner different from other aircraft? British Airways describes it as 'one of the most technologically advanced aircraft' in its fleet. It has the largest windows of any commercial airliner. Instead of blinds, windows have dimmer switches. Within the cabin, a mood-lighting system creates the impression of daylight and nighttime to help passengers adjust to different time zones. The 787 is said to be one of the more environmentally efficient planes. It can fly for 10,000 miles without needing to refuel, and uses 20 per cent less fuel than similarly sized aircraft. Due to its fuel efficiency, the Dreamliner is favoured for long-haul flights. What other issues has Boeing faced? In 2018 and 2019, there were two major crashes involving the Boeing 737 Max in which 346 people died. The accidents, involving a Lion Air Flight in Indonesia and an Ethiopian Airlines flight, were linked to problems with the automatic stabilisation system, which the crew were unable to successfully override. There have been other issues with the 737 Max in recent years. In January 2024, a door plug ejected from an Alaska Airlines flight, causing decompression in the cabin. The subsequent FAA investigation found instances of manufacturing lapses. Boeing is also suffering lengthy delivery delays, in part due to more rigorous regulatory scrutiny after the cabin panel blowout, as well as supply chain disruptions. Is Air India safe? Air India has had a number of fatal accidents over the years. In August 2020, a Boeing 737-800 flying from Dubai to Calicut overshot the runway, killing 18 passengers. In May 2010, a 737-800 from Dubai to Mangalore overshot the runway, killing 158 passengers on board. Back in June 1982, an Air India plane crashed in Mumbai due to poor weather conditions, killing two crew members and 15 passengers. The year before, an Air India Flight from Zimbabwe to Mumbai was hijacked at Mahe Airport in the Seychelles. All 78 passengers were released. The first Air India incident was in 1978, when a plane crashed off the coast of Mumbai after the captain became disorientated. All 213 on board died.
