TOKYO (Reuters) – A consortium of roughly 70 Japanese firms, including the country’s three mega-banks, will begin experiments to launch a digital currency as early as the latter half of 2022, the Nikkei newspaper said on Wednesday.

The digital currency will be backed by bank deposits and use a common platform to speed up large-scale fund transfers and settlement among companies, and cut costs, the paper said.

The consortium, including Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc, have been meeting regularly since last year to study ways to build a common settlement infrastructure for digital payments.

The three banks have each rolled out their own digital payment systems but lag efforts by tech firms such as SoftBank Group unit PayPay.

The initiative could affect the Bank of Japan’s separate ongoing experiment for issuing a central bank digital currency (CBDC), as policymakers have said they would work closely with the private sector if it were to issue a CBDC.

The Japanese are the most cash-loving population in the world and many transactions are still completed in notes and coins. Authorities have been, however, keen to promote cashless transactions to increase productivity.

(Reporting by Leika Kihara; Editing by Chris Reese and Stephen Coates)

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