National Banks in Meiji Japan

It was superseded by the newly created Bank of Japan, inspired by European models and established in the early 1880s, and fully phased out in the late 1890s.

Immediately after the Meiji Restoration in 1869, Japanese merchants in major trading centers introduced prototypes of modern commercial banks, known as kawase-kaisha [ja], which were authorized to issue banknotes.

[1]: 5 In 1870 Itō Hirobumi, then a senior official at the Ministry of Finance, proposed a system based on multiple banks issuing gold-back paper currency.

[1]: 5-6  Shibusawa Eiichi, by then also a Finance Ministry official, drafted the law under the guidance of leading statesman Ōkubo Toshimichi.

[1]: 6 In 1876, the legislation was amended in a way that made the creation of new banks much easier, as banknotes no longer had to be convertible in gold and could be backed by national bonds.

During the rebellion, an original type of paper money was issued by the rebel leader Saigō Takamori in order to finance his war effort.

[3] In the early 1880s, Matsukata Masayoshi brought an end to the monetary system based on competing national banks of issue, in line with his deflationary policy orientation.

In 1882, he established the Bank of Japan inspired by European experiences, more or less along the lines Yoshida had advocated a decade earlier.