Cash is king in Japan – but for how long?

If you’ve ever been to Japan, then you will know that it is incredibly common to pay for things in cash, carrying wads of 1000¥ notes in your wallet at any given time. In the UK, I’ll usually pay by card for anything over £20, or even for lower amounts if I have neglected to take any cash out (I have not yet made jump to contactless on my phone). Yet in Japan, I paid my rent in cash, and counted out the notes for my health insurance at the local convenience store. Although I had a functioning bank account with a card, paying by cash never seemed as simple as it is in the UK. Sometimes I’d find a vending machine that accepted an IC card (chargeable card for public transport), but otherwise cash rules.

This is slowly changing, however. As a result of the pandemic, people are less comfortable handling cash in Japan and the government is making efforts to improve access to digital payment offerings, or for people that want to keep using cash, the option of automated checkouts, such as at municipal ward offices. It is thought that concerns over touching cash will help Japan reach its target of having 40% of payments be digital by 2025. For comparison, in 2018 cash transactions accounted for less than a quarter of all transactions in the UK, and have only decreased since the pandemic (I have not been able to find exact statistics).

Japan is behind the UK, but even before the pandemic, Japanese households were regularly using e-money for small transactions. There has even been some innovation in Japan around special electronic currencies. In 2018, a virtual currency called Otaku Coin was launched, designed to get anime fans to engage with the industry through participating in online forums, watching content, and sharing content, for which they would be rewarded with “coins” they could spend on merchandise or use to support projects and anime creators. Now, during this current pandemic, digital currencies that are only valid in specific regions are being trialled as a way to boost the local economy. These effectively act as digital vouchers, replacing the need for paper coupons, thus cutting down on waste.

To talk about digital currency, it would be amiss not to talk about cryptocurrency and blockchain, which are regularly in the news. Japan has been generally slow to invest in the technology, but The Bank of Japan is now investigating the possibility of creating a national digital currency. It has been suggested that digital currencies like Bitcoin could solve Japan’s deflating economy.

Why do you think Japan still uses cash so much? Do you think it is in fact a good thing and that we have gone too digital in the UK? Let us know in the comments!

Image: “Game!” by OiMax is licensed with CC BY 2.0. To view a copy of this licence, visit

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