Japan's Shift Towards Cashless Payments Accelerates Amid Digital Currency Developments

According to PANews, Japanese central bank officials are intensifying efforts to keep pace with the rapid development of digital currencies, potentially accelerating Japan's transition from a cash-dominated society to cashless payments. Government data reveals that the proportion of cashless payments in Japan rose from 13.2% in 2010 to 42.8% in 2024, surpassing the government's target of 40% a year ahead of schedule. Despite Japan's global lag in payment technology, the increase in cashless transactions is prompting policymakers to ensure they are prepared to adapt to changing public preferences in payment and settlement methods. This includes the issuance of central bank digital currency (CBDC). Kazushige Kamiyama, Executive Director of the Bank of Japan, stated, "Although the issuance of paper currency in Japan remains high, the rapid digitalization may significantly reduce its usage in the future. Therefore, Japan must consider measures now to ensure its retail settlement system is convenient, efficient, universally accessible, secure, and resilient." Bank of Japan Deputy Governor Shinichi Uchida noted that CBDC could become a "key component of infrastructure" shaping the future of Japan's payment and settlement systems. However, he emphasized that the demand for cash in Japan is not expected to disappear in the short term.