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SBI Eyes Programmable Money In Japan Through The Smart Yen Initiative

Programmable money is a very intriguing concept that many banks would love to get their hands on. In Japan, SBI is going down this path following its investment in Digital Asset. The joint effort will focus on establishing a “smart yen”, although it remains unclear if that will benefit consumers. 

The Smart Yen Is Coming

The new venture between SBI and Digital Asset will officially kick off in late 2022. There will be equal ownership within Japanese and East Asian markets to create a balanced approach. Establishing a “smart yen” is an intriguing concept, although one that needs to be thought through properly. Programmable money is nothing new since the inception of Bitcoin and other cryptocurrencies, but it has not been attempted as a national currency.

The smart yen leverages Digital Asset’s cross-blockchain smart contracts. Those contracts will be applied to programmable money, consisting of digital currency coded to move between wallets when certain conditions are met. It will serve as an overlay to existing payment rails and enhance condition-based payments and reward programs.

SBI Holdings President and Representative Director Yoshitaka Kitao adds:

“Digital Asset has excellent technology and business concepts. A new cash concept, ‘smart yen’, will make it possible to build a revolutionary, customer-oriented cash system by directly linking each individual customer loyalty program to deposits, and fully automating the process of providing loyalty through smart contracts. We expect to further accelerate the SBI Group’s digital transformation by actively introducing Digital Asset’s technology, including the stablecoin ‘smart yen’ concept.”

It is crucial to note the smart yen is not a CBDC, even though it shares some similarities. There is no plan to make it the default national currency of Japan now or in the future. Additionally, Digital Asset raised $120 million in funding in April 2021 to focus on programmable money and the broader role of smart contracts in finance.