There has been a lot of debate on the effectiveness of Cryptocurrency, and its impact on the worldwide economy. It seems that we may be able to get a definite answer as early as next year because Japan is experimenting with Blockchain technology in the upcoming Olympics. The decision to introduce cashless payment modes is made by Japanese Prime Minister, as a part of Japan’s Olympics preparation.
There is a shortage of cashless payment modes in the world’s third largest economy because unlike Western economies or Japan’s neighbors, Japanese rely on cash to buy products. At any one time, billions of Yens are transported across the country from banks to financial institutions, which costs $18 billion per year just to move bundles of cash. This is in contrast to China and South Korea, where consumers increasingly rely on cashless transactions.
The decision to use Blockchain supported cashless system makes sense because thousands of foreign visitors will visit Japan for the Olympics. A large majority of these visitors will be from the United States and Europe where credit cards are used for transaction. If Japan does not offer these visitors cashless alternative, there will be a lot left on the table.
Mitsubishi, the world’s fifth largest bank by total number of assets, has teamed up with an American based company, Akamai, to introduce cashless network that can handle millions of transactions. Initial tests by Mitsubishi and its partners have revealed that their Blockchain network can handle nearly one million transactions per second with the ability to process every transaction in less than two seconds. The company also claims that their network will eventually be able to handle ten million transactions per second. This will be a remarkable achievement considering that modern payment networks can only handle several thousand transactions per second.
Mitsubishi is not the only company that is trying to fill the gap. Both the public and private sectors in Japan are planning to introduce cashless point of sales for everything from highway tools, to card processing, and in-app purchase. For instance, Mizuho Financial Group has recently tested its crypto-token called J-Coin, which will be introduced as early as this March. Similarly, SBI Holdings, another prominent firm, is ready to roll out S Coin, which also uses Blockchain to provide solutions to retail storefronts.
Experts predict that Japan is gearing up for a very big test. While most eyes will be on the Olympics, financial experts will definitely keep a keen eye on the “crypto-test” instead of the Olympics.