After China, Japan seems to be moving in full force. The central bank digital currency market has been firing up as digitalization has been gaining momentum. While several countries have just started out exploring the prospects of the CBDC, a few others like China have already begun testing the digital yuan.
Now, Japan seems to be catching on to the CBDC train. In a recent announcement, the country’s central bank, Bank of Japan revealed that it was moving ahead with respect to the pilot of its CBDC.
Japan Steers Towards The Development Of CBDC
The Bank of Japan had reportedly rolled out the Liaison and Coordination Committee to spearhead the development of the CBDC. While the first meeting of the Liaison and Coordination Committee on Central Bank Digital Currency was recently concluded, the Executive Director of the Bank of Japan, UCHIDA Shinichi addressed the same. The speech read,
“We will begin to test the technical feasibility of the core functions and features required for CBDC through a Proof of Concept (PoC) from April 2021. 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.”
Additionally, the Japanese central bank revealed that Phase 1 of the CBDC pilot would make a debut by next month. The bank has reportedly been working on the pilot since October, last year.
Furthermore, speaking about the repercussions of launching a CBDC, the Exec suggested that the Japanese central bank would roll out one keeping in mind its compatibility with the future payment and settlement systems. Its coexistence with cash was also mentioned in the speech. The speech further read,
“These role-sharing arrangements will still be necessary even in a world with CBDC. I believe that it is the private sector, such as yourselves, that should be the chefs who serve up the dishes, or convenient payment services, by using CBDC — provided as a public good — as an ingredient.”