TOKYO -- Mizuho Financial Group plans to issue a digital currency, dubbed J-Coin, with other Japanese banks next year and set processing fees paid by merchants lower than those for credit cards, President Yasuhiro Sato said in a recent interview with The Nikkei.
A pilot study will be carried out by March in one or two locations. The J-Coin project will gain momentum "if the benefits to users and participating merchants become clear," said Sato.
J-Coin will be converted into yen on a one-to-one basis and used at supermarkets, restaurants and other retailers, with shoppers scanning a QR code with their smartphones.
Mizuho plans to establish an issuing company next year and is expected to ask other financial institutions to invest as well.
It is important for J-Coin to be able to connect with Alibaba Group Holding's Alipay mobile payment platform, according to Sato. Alipay is widely used among Chinese consumers, and a linkup would make it easier for businesses accepting J-Coin to tap demand from Chinese and other foreign visitors to Japan.
Credit card companies take a percentage of total payments made through retailers as fees. By setting lower fees for J-Coin, a latecomer to Japan's cashless payment scene, Mizuho aims to increase the number of participating merchants quickly and make J-Coin popular among consumers.
Mizuho also seeks to improve convenience by allowing users to exchange J-Coin with other digital currencies and electronic money.
Meanwhile, rival megabank Mitsubishi UFJ Financial Group is developing its own digital currency, MUFG Coin.