GMO Aozora Net Bank will issue the yen-based digital currency, called "DCJPY", which will then be used by telecommunication firm Internet Initiative Japan (IIJ) for settlement of clean energy certificates, DeCurret said.

Transaction of DCJPY will be made using a network launched by DeCurret which, unlike stablecoin, is backed by bank deposits through block-chain technology, DeCurret added.

The launch would align Japan with other countries that have seen an increase in the number of digital currencies backed by bank deposits and block-chain technology, and could affect the central bank's plan for issuing its own digital yen.

DeCurret has been spearheading the launch of a digital currency by anchoring discussions at a consortium of Japanese firms keen to tap the technology.

The consortium, which includes megabanks Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Financial Group Inc, has been meeting regularly to study ways to build a common settlement infrastructure for digital payments.

(Reporting by Leika Kihara; Editing by Krishna Chandra Eluri)