BoJ ramps up calls for cashless payments

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.”

- LEIKA KIHARA

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.