Japan spruced up its central bank digital currency [CBDC] plans after China decided to reveal its progress in the same. Several countries across the globe seem to have been alarmed by China’s plunge into financial digitalization.
While Japan has been working towards the pilot of their native CBDC since October 2020, the country’s central bank, Bank of Japan announced that Phase 1 of the digital yen would be launched in April. The bank seemed to be on its toes as it revealed that this pilot was rolled out as scheduled.
Japan’s Timely Developments
Central bank-issued digital currencies created an uproar among countries across the globe and Japan stated that it would get on this bandwagon. In a recent announcement titled, ” Commencement of Central Bank Digital Currency Experiments” the country’s central bank affirmed that it would soon begin “experiments” with regard to its CBDC.
The announcemnet further read,
“The Bank of Japan has been undertaking preparations to begin experiments on Central Bank Digital Currency (CBDC) in early fiscal year 2021, to test the technical feasibility of the core functions and features required for CBDC. As necessary preparations are now complete, Proof of Concept (PoC) Phase 1 begins today.”
Furthermore, the bank pointed out that a test environment would soon be formulated as part of Phase 1 in order to facilitate experiments pertaining to CBDC as a medium of payment, including “issuance, distribution, and redemption.” This will reportedly be done throughout March 2022 for about a year.
The Asian country seemed to be adamant about the launch of a CBDC as it even set up a Liaison and Coordination Committee on Central Bank Digital Currency. This committee recently had its first meeting where the Executive Director of the Bank of Japan, UCHIDA Shinichi suggested that “if the Bank judges it necessary to go a step further, it will also consider a pilot program that involves payment service providers (PSPs; e.g., banks and non-bank PSPs) and end users.”
