Nigeria and Japan Commence Development of Native Central Bank Digital Currencies

Central banks will not give up on their plans to create national digital currencies anytime soon. Although this concept remains highly controversial in the financial sector, two new participants have unveiled their plans. Both the Central Bank of Nigeria and a consortium of Japanese banks aim to issue their own currencies moving forward. It’s an interesting concept, even though it remains to be seen how these ventures will play out.

More Central Bank Digital Currency Plans

It is evident that the concept of a central bank issuing its own digital currency makes a lot of sense for such institutions. After all, central banks are responsible for issuing new paper currency and coins, which also makes them the perfect candidate for a digital counterpart. Given our society’s shift toward digital payment solutions, it is not surprising central banks would aim to capitalize on this momentum as soon as possible.

That being said, the concept of central bank digital currencies remains highly controversial. These new currencies are designed specifically to complement cash rather than replace it. This constitutes a lot of additional value created out of thin air, which can have disastrous effects on local economies. Moreover, such concepts don’t make much sense in countries where cash usage is still king, although those nations are fewer in number compared to just a few years ago.

One of the latest countries to explore a central bank digital currency is Nigeria. That shouldn’t come as a big shock whatsoever, as Nigeria has been dealing with its own financial problems over the past two decades. The Central Bank of Nigeria is in the process of introducing its digital currency, which will be issued using distributed ledger technology. Coming up with new ways to exchange value in Nigeria is of the utmost importance.

Although few details are known yet about Nigeria’s new currency, it appears it will go by the name of Corion. This currency will be usable for daily purchases, paying bills, and exchanging value across borders. It is curious to see the Central Bank of Nigeria suddenly claim that “digital currencies are the future”, considering they have previously issued warnings against bitcoin and altcoins on several occasions. For now, there is no official timeline for the deployment of Corion.

A lot of people were surprised to learn that several Japanese banks are looking to issue their own digital currency as well. This new initiative is known as J-Coin, and the consortium is led by Mizuho Financial Group and Japan Post Bank. Their goal is to introduce the new currency by the time the 2020 Olympics in Tokyo come around. Such a timetable will give all parties involved ample time to evaluate risks and propose suggestions before releasing J-Coin to the masses.

As one would expect, J-Coin has the support of both regulators and the Japanese central bank. Their main objective is to create a currency which people can use to pay for goods and services using their smartphone. Although Japan is a cash-dependent country right now,  there is a growing need for digital payment solutions. More specifically, the country’s central bank wishes to reduce the costs associated with this dependency on cash, and J-Coin may be the solution they have been looking for in this regard.