New Japanese banknotes are 'unsold'

tiền giấy - Ảnh 1. — Bank of Japan (BOJ) Governor Kazuo Ueda announced that new banknotes will start circulating on July 3, 2024 - Photo: JIJI

According to the Japan Times , the Bank of Japan (BOJ) will start issuing new banknotes from July 3, 2024 due to the sharp increase in counterfeit money. The new banknotes use 3D technology, applying the most advanced anti-counterfeiting technology in the world today.

However, the new banknotes have not been very popular, accounting for only 28.8% of the total banknotes in use. This figure is only half that of the previous currency change in 2004, when the new banknotes accounted for more than 61% of the total banknotes in circulation after only 11 months of issuance.

According to the BOJ and experts, there are many reasons why the pace of monetary change is slower than in 2004.

First, the total quantity and value of cash in circulation has increased sharply compared to 20 years ago. The total value of cash in circulation increased from 77,000 billion yen (in 2004) to about 117,000 billion yen in 2025, while the number of banknotes increased from 11.3 billion to about 17 billion - an increase of about 50% in both value and quantity.

Second, the trend toward cashless payments is growing rapidly. According to the Japanese Ministry of Economy , Trade and Industry, the proportion of electronic payments in Japan increased from 16.9% in 2014 to 42.8% in 2024 – surpassing the 40% mark for the first time. This reduces the number of cash transactions, leading to fewer opportunities to collect old bills.

Another significant factor is the phenomenon of people hoarding cash at home - known as "tansu yokin" (keeping money under the mattress). An estimated 49 trillion yen (about $340 billion) is being kept in people's homes instead of being put into circulation, slowing the process of replacing old money.

In addition, unlike the situation in 2004 - when counterfeit money was so widespread that the government had to quickly change the currency - the problem of counterfeit money is no longer as urgent as before. According to the Japanese Police Yearbook, the number of counterfeit bills detected has decreased from more than 25,000 in 2004 to only 681 in 2023.

Infrastructure is also a barrier as although ATMs have fully supported the new currency, many vending machines have not yet updated. According to the Japan Vending Machine Association, only about 50-60% of vending machines can recognize the new currency, mainly due to the high cost of upgrading. Businesses are waiting for the new currency to become more popular before investing in changing equipment.

However, the BOJ insisted that the issuance process was proceeding smoothly and that the slow take-up was within initial expectations. "There have been no major problems and issuance is progressing smoothly," a BOJ representative said.

Mr. Takanobu Kiuchi - an expert at Nomura General Research Institute - commented that with the current digitalization trend, this series of banknotes is likely to be the last large-scale issuance by BOJ in the past 140 years.

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