Japan is pushing cashless payments to keep up with the rest of Asia

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Japan is preparing to innovate and implement a robust payment system as its economy gradually becomes cashless.

Kazushige Kamiyama, executive director of the Bank of Japan (BOJ), said that while he has not yet had a firm stance on CBDC, he needs to develop other payment options as society becomes more and more cashless.

According to an article published by Reuters on June 4, 2025, Kamiyama said that while banknotes still exist in high circulation in Japan, physical currencies could see a sharp decline in usage as Japan rapidly becomes digital.

“So Japan must consider the steps now to ensure that the retail settlement system is convenient, efficient and universally accessible while still safe and resilient,” he said.

He further explained that the government and Congress have decided to issue CBDCs and that they have not made any decisions on the issue so far.

💴🖥️BOJ has not yet said its CBDC plan, but is promoting innovation in digital payments
Japan is not currently issuing digital yen, but Boj is urging it to upgrade to a payment system in the age of cashless.
The move follows the global CBDC debate that has been rekindled by Trump’s digital dollar ban. pic.twitter.com/thkdn2qqgd
-PIQ (@PIQSUITE) June 4, 2025

However, the country’s central banks conducted experiments with private companies in digital yen and exchanged opinions.

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Asia appears to be leading CBDC rates

The talk around the CBDC appears to be in decline and flowing, largely restrained after President Trump banned US CBDC jobs. But they seem to be revived at least in Asia.

Several Asian countries have been successful in CBDC testing and pilot projects. For example, India’s CBDC Pilot Program has successfully provided farm loans directly to tenant farmers in the country.

Additionally, the Reserve Bank of India (RBI) is considering cross-border CBDC pilots as the electronic rupee circulation exceeds Rs. 1,016 crores (over $118 million) from rupee. In 2024, it would have been 232 crores (approximately $27 million). We are also considering entering a multilateral CBDC initiative through the Bank of International Strements (BIS) Innovation Hub.

Additionally, RBI believes it is expanding the use cases and scope of both e-Rupee retail and e-Rupee wholesale pilots. Plans are in place to improve the technical aspects of the aggregator framework and further increase transparency, convenience and efficiency.

Other Asian countries have also warmed up to CBDCs. For example, Korea is testing two CBDC projects. Project Hangan and Project Agora are domestic tokenized deposits involving multiple banks and institutions.

Interestingly, Bank of Korea Governor Rhee Chang-Yong personally visited six largest US banks to defend the role of wholesale CBDCs after the bank announced its announcement of plans to develop joint stability coins.

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Cashless payment transition in Asia

Driven by technological advances, changing consumer behavior and government initiatives, Asia is rapidly moving towards a cashless society. The adoption of India’s unified payment system is highlighted by network processing, which processes more than 13.1 billion transactions by fiscal year 2023.

China’s Alipay and Wechat pay accounts to over 1 billion users. Furthermore, cash transactions in China are expected to fall to just 3% by 2027. Beyond these Asian giants, other Southeast Asian countries like Thailand and Singapore are accepting cashless payments.

They developed interoperable systems such as PromptPay and PayNow, enabling cross-border transactions and reducing their reliance on Western credit card networks.

The surge in smartphones has been the catalyst for this conversion, especially in areas where bank penetration has previously been low.

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Key takeout

Japan has not yet decided its stance on CBDC, but it is experimenting with digital yen
Asian countries such as India and South Korea are leading CBDC accusations
Asia is rapidly becoming a cashless payment association led by India and China