Yomiuri Shimbun Staff Writer

Executives of major Japanese financial institutions and others have established the Digital Currency Innovation Organization (DCIO), in an effort to promote the adoption of tokenized deposits, which utilize blockchain technology for efficient payments.

Representatives of the general incorporated association expressed their intention to work on standardization and policy proposals at a press conference held in Tokyo on Friday.

"We will promote the development of a market environment and institutional design for societal implementation through an 'All-Japan' effort," said Eijiro Katsu, former vice finance minister, who serves as DCIO's representative director.

Executives from Japan's three megabanks, SBI Shinsei Bank Ltd. and other companies have been appointed as directors. Former Bank of Japan Gov. Haruhiko Kuroda also serves as the executive advisor.

Tokenized deposits involve private banks acting as issuers, enabling digital transactions where deposits are recorded as "tokens" on a blockchain. An advantage of such deposits is the ability for settlements and transfers quickly. Depending on the system design, transactions could be supported 24 hours a day, 365 days a year.

To expand their use in the future, it will be necessary to build a settlement network connecting banks and to work on matters such as standardization.

GMO Aozora Net Bank Ltd. has already introduced tokenized deposits, and is also involved in a pilot program supported by Japan's Financial Services Agency.

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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