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LONDON — A consortium of Japanese banks are set to launch a new national digital currency in a bid to wean citizens off cash, the Financial Times reports.

The FT says that a consortium led by Mizuho Financial Group and Japan Post Bank plans to launch the new digital currency in time for the Tokyo 2020 Olympics.

The new project, which has the support of Japan’s central bank and regulators, aims to develop technology to allow Japanese people to pay for goods and services with their smartphone.

Cash currently represents 70% of all transactions by value in Japan but such a heavy cash dependency incurs costs for banks and governments. Banks must pay to handle, transport, and audit large amounts of cash, while governments risk losing tax revenue to undocumented cash-in-hand work or black market transactions.

The consortium of banks estimate that the adoption of a new digital currency could add ¥‎10 billion ($US90 million; £67 million) to the economy, the FT reports. J-Coin will be exchanged at a one-to-one rate with yen.

Several European economies are moving towards a cashless society thanks to the success of digital payment methods: physical cash in circulation has declined by 27% since 2011 in Sweden thanks to the popularity of digital payments; Denmark wants to allow shops, including restaurants, gas stations, and clothing stores, to stop taking cash; The Bank of Korea has said it’s aiming for a cashless society by 2020; and cash is now in the minority in Britain.

The move towards cashlessness in the Nordics has been helped by the popularity of payment apps like Swish in Sweden and MobilePay in Denmark, while the rise of contactless payments through debit and credit cards has helped in Britain.

Japanese banks are not alone in looking to develop their own digital currency. Leading banks including HSBC, Barclays, UBS, and Santander are developing a “Universal Settlement Coin” to make trade amongst themselves easier, inspired by the success of digital currencies like bitcoin.

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