The Potentiality of Community Currencies in Japan with a Low Birthrate and an Aging Population

Author Name FUJI Kazuhiko (Senior Fellow, RIETI)
Creation Date/NO. January 2017 17-P-001
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In Japan with its low birthrate and an aging population, people are having difficulty in building relationships with each other. Families are losing their traditional roles, and local communities have not been revitalized yet. In such circumstances, community currencies are effective in turning things around as money plays the role as the lubricating oil of relationships in Japanese society.

During the Edo period, community currencies (hansasu) contributed to the revitalization of regional economies. Since the war ended, community currencies have become unfamiliar to Japanese people. Thanks to the application of blockchains (digital currencies), the cost of flotation of community currencies have lowered dramatically. Furthermore, legal and tax problems have been solved.

Companies which pay attention to the potentiality of community currencies have begun to introduce this as a means of revitalizing the regional economies. From the viewpoint of the welfare of regional societies, local governments should take the initiative in managing community currencies and stimulate the organization of multi-layer communities. To strengthen confidence in community currencies, a mechanism that reflects the demand of residents should be structured. Such policy is essential as the first step toward a true local autonomy.