A group of Japanese banks are set to initiate talks to develop a new settlement system to enable small payments.
According to a Reuters report, the initiative includes three large banks, namely- Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group. Two lenders owned by Resona Holdings will also participate in the discussions.
The move seeks to establish a common settlement infrastructure in a bid to reduce inter-bank fees.
This comes after the three large banks formed another group with non-financial firms to explore the establishment of common infrastructure for digital payments.
Last month, the Japanese government also called for a review of the bank transfer fees. The fees is unchanged for more than 40 years.
Recently, the government has ramped up efforts to increase digital payments in the country where people prefer cash transactions. The current Covid-19 pandemic, which boosted digital transactions, also contributed to the acceleration of efforts.
Last month, Bank of Japan (BOJ) formed a new team to assess the feasibility of central bank digital currencies (CBDCs). The team will work under BOJ’s payment and settlement systems department.
China is also working to introduce digital currencies. Last month, Bloomberg reported that People’s Bank of China was planning to leverage Meituan platforms and test the virtual currency.