Japan's Push for Cashless Payments to Keep Pace with Asia

Japan is gearing up to innovate and introduce robust payment systems as its economy gradually shifts away from cash. Bank of Japan’s (BOJ) Executive Director Kazushige Kamiyama stated that the nation is eager to explore various payment options given the declining reliance on physical cash.

An article published on Reuters on June 4, 2025, highlighted Kamiyama’s insights on Japan’s future in digital transactions:

“As such, Japan must consider what steps it can take now to ensure its retail settlement system is convenient, efficient, and accessible universally while being safe and resilient.”
(Translation: “日本は、今後の小売決済システムが便利で効率的で、誰にでもアクセス可能であり、安全で弾力性があることを保証するために、どのような手段を講じるべきかを考慮しなければならない。”)

Despite not having made any firm decisions on Central Bank Digital Currency (CBDC) yet, Japan’s central bank has begun engaging with private entities to develop a Digital Yen.

Asia Leads in CBDC Initiatives

The momentum behind CBDCs is fluctuating, with interest sustaining in Asia especially after past prohibitions in the U.S. Countries like India are advancing with successful pilot projects such as direct agricultural loans for tenant farmers through its CBDC initiative.

The Reserve Bank of India is also contemplating a cross-border CBDC pilot, while South Korea is actively testing two separate CBDC projects. Surprisingly, Bank of Korea’s Governor, Rhee Chang-yong, is advocating for the introduction of wholesale CBDCs in collaboration with major banking institutions.

Trends in Cashless Economy

Overall, Asia is rapidly evolving towards a cashless economy, with India processing over 131 billion transactions in the fiscal year ending 2023. China’s Alipay and WeChat Pay dominate with over 1 billion users. Furthermore, cash transactions in China are forecasted to plummet to merely 3% by 2027.

Innovative platforms like PromptPay in Thailand and PayNow in Singapore are also gaining traction, fostering cross-border transactions.

Key Takeaways:

Japan has not yet decided its stance on CBDC but has conducted experiments around a Digital Yen.
Asian nations including India and South Korea are at the forefront of CBDC initiatives.
The region is quickly transforming into a cashless payment society, led by significant advancements in India and China.