Salaries can be paid in digital wallets in Japan in future - is this an indication of future developments?
Up until a few years ago, digital money and digital Bitcoins as virtual currencies, which have been favored by criminals. They exploit the high level of privacy offered by these systems to make it more difficult to trace transactions.
However, it didn't take long for companies to become interested in the new medium and the possibility of using it. Use of digital money also examine the payment of their employees' salaries.
Already in 2018, the Japanese company GMO Internet Group allowed four thousand of its employees to receive their salary in bitcoin up to a maximum of 100,000 yen; this was equivalent to about 750 EUR. One of the reasons was that cryptocurrencies are excellent as an investment for the future, where the value of money is under the control of the market itself.
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Digital payments continue to gain ground
Meanwhile, more and more online companies are accepting digital money as a means of payment, making money transfers faster, easier and more secure. In 2022, there are countless companies working in the field of cryptography and blockchain technology, offering various services. The gaming industry is particularly noteworthy here. Online Casinos are always interested in new developments and have a lot of capital to invest. It is therefore not surprising that, in addition to various e-wallets, there are numerous platforms that accept cryptocurrencies as a means of payment.
Platforms that enable people to work and get paid with digital money are popping up all over the Internet. Around the world, regulations are adapting to this technological shift and the ever-growing popularity of digital assets.
There are now also several solutions for companies worldwide that decide to follow the path of innovation and offer digital payment solutions to their employees. Now Japan is also moving to adapt to this trend.
Salaries in Japan soon to be digital
Salaries in Japan can currently only be paid in cash or by bank transfer. Digital salary payments were previously not permitted. However, with the recent promotion of cashless payments, the government is now willing to lift the ban on salary payments using digital money. Digital money is a general term for currencies that can be paid electronically instead of in cash.
What is the digital salary payment?
Digital salary payment is a method in which the salary is transferred in digital money, i.e. cashless, directly to a digital wallet. At present, this type of payment still violates the Occupational Health and Safety Act in Japan and has not been permitted to date.
Since 2021, there have been heated discussions about hiring foreign workers, who are finding it difficult to open a bank account there due to Japanese legislation. There have also been long-standing efforts by politicians to promote cashless payments in order to encourage the digital payment of salaries, among other things.
Although there were no concrete prospects for lifting the ban until recently, the Ministry of Health, Labor and Social Affairs has been increasingly discussing wage payments with digital money.
It has now been confirmed that the Japanese government is making final adjustments to lift the ban on digital salary payments from April 2023. Employees in Japan will then be able to receive their salary directly to a digital wallet or payment app account.
Is this an indication of future developments?
The anticipated change in the law presents a good opportunity to further promote cashless payment transactions in Japan and to close the gap with its Asian neighbors and the USA. Compared to other countries, Japan has lagged far behind in digital payment transactions.
This type of digital remuneration can also be beneficial for companies that lack liquidity at any given time. If this type of salary payment becomes even more popular, it could become especially prevalent in countries with very volatile local fiat currencies or for companies with cross-border salaries.
In any case, the Japanese initiative is a further indication of future developments in the cashless and cash-based payment sector. in digital payment transactions, that will shape our future for payments worldwide. With the increasing use of digital wallets, digital payments are expected to grow by 25 % by the end of 2024.
