Japan has long been a cash-centric society. That’s rapidly changing, however, as the country switches over to heavier use of cashless technology. And while cash won’t disappear in Japan tomorrow, one item might fall earlier than the others: the country’s 1 yen coin.
A 65 Year History
The current 1 yen coin, which dates back to 1955, has an interesting history. Made of aluminum, it was intended as a replacement for the 1 yen brass coin (which was obsoleted in 1953) and for the 1 yen bill. (Yes, there used to be 1 yen bills, 100 of which would equal 100 yen, or less than USD $1. Imagine paying for a cup of coffee with those!)
Before creating the coins, the government put out an open call for designs. It selected front and back coin designs from the 2,581 submissions it received. This design hasn't changed in 65 years. Share on XAnd there are a lot of them. On average, 600 million 1 yen coins have been minted every year since their inception. There are currently some 440 billion in existence. Many of these were minted during economic boom periods in Japan’s 1960s, 70s, and 80s. The largest spike was in 1989 (first year of the Heisei era), when 2 billion new coins were minted. The spike coincided with a rise in Japan’s consumption tax to 3%.
Goodbye, 99 Yen Specials
That vaunted history, however, may soon come to an end.
The first reason? Cash is so yesterday. As I’ve reported before, after years of lagging behind other major Asian countries, Japan is finally seeing a surge in cashless usage. Convenience stores, supermarkets, retail outlets, restaurants, and even some Buddhist temples are all getting in on the action.
The rise in cashless has been led primarily by QR code apps such as Paypay, in which shoppers present a QR code on their device that’s scanned at a retailer. While convenience and some clever promotional programs have helped boost cashless, the primary driving factor now is the COVID-19 crisis. Wary of spreading infection through high-contact cash payments, more customers and retailers are adopting cashless. While some 39% of Japanese consumers say they use cash, that number’s down two points from January – and the number using credit cards and QR code apps has risen by nearly 3%.
The second reason? Businesses seem to be sick of it. Recently, the Italian-themed family restaurant chain Sazeriya announced it was overhauling its entire menu and eliminating all prices that don’t end in a round number (e.g., 99 yen). In many cases, this involved raising the cost of menu items by one yen to round it up to the next full 50 or 100 yen. However, some prices were lowered – e.g., a small serving of rice went from 169 yen down to 150 yen.
A Worldwide Trend
Saizeriya made the move specifically to reduce the amount of back-and-forth cash transactions in our new COVID-19 world. However, it could kickstart a trend that could eventually see Japan saying sayonara to the 1 yen coin.
Japan wouldn’t be unique in this move away from tiny denominations. Canada stopped minting its 1 cent coin in 2013. And the European Union is currently debating whether to take the same measures with both its 1 cent coin and its equally pesky cousin, the 2 cent coin.
The 1 yen coin doesn’t seem in any danger of disappearing overnight. However, given world trends – and Japan’s own steady move away from cash – I wouldn’t be surprised if, in 20 years from now, it isn’t anything but a collector’s item.
