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Pacific island nations probe digital currencies with Tokyo startup

  • December 29, 2021
  • , Nikkei Asia , 3:02 a.m.
  • English Press

By Sekigucgu Keita, fintech editor

 

TOKYO — Four Pacific island nations have started to consider issuing their own digital currencies with Tokyo-based startup Soramitsu providing assistance with the feasibility studies.

 

Soramitsu will first survey and analyze the financial infrastructures of Fiji, the Solomon Islands, Tonga and Vanuatu. This will include the state of payments between financial institutions, the spread of a cashless economy and the roles played by fund transfer agents.

 

Next, Soramitsu will carry out tests to determine whether a national digital currency can be instituted in the four countries, which still use boats to transfer cash. The startup previously collaborated with Cambodia’s central bank to develop the digital payment system Bakong.

 

This latest tie-up traces back to July’s Pacific Islands Leaders Meeting, which was also attended by then-Japanese Prime Minister Yoshihide Suga.

 

Attendees at the meeting adopted a joint action plan calling for “strengthening Pacific bonds and for mutual prosperity.” The text stated that Japan would cooperate in financial infrastructure.

 

Japan’s Cabinet Secretariat has followed through on the pledge by commissioning the NTT Data Institute of Management Consulting to analyze the financial infrastructures of Pacific island nations. Part of that work has been contracted out to Soramitsu.

 

Central bank digital currencies are gaining traction around the world. China is expected to engage in a full-fledged rollout of the digital yuan next year. Japan began its own tests this April, and the European Central Bank announced in July that it would start preparing to issue the digital euro.

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